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Crude Oil Closes Higher On Weak Dollar, Bernanke

3/26/2012 3:12 PM ET

U.S. crude oil futures closed higher Monday, after comments by U.S. Federal Reserve Chairman Ben Bernanke that economic growth in the country may not be sustained. With possible indications of continued policy assist from the Fed, oil prices found support. Nevertheless, the dollar trended down after shedding gains made earlier in the day against most major currencies.

Light Sweet Crude Oil futures for May delivery, added $0.16 or 0.2 percent to close at $107.03 a barrel on the New York Mercantile Exchange Monday.

Crude prices scaled a high of $107.32 a barrel intraday and a low of $106.19.

The dollar pared gains after U.S. Federal Reserve Chairman Ben Bernanke said he was not "sure that the recent pace of improvement in the labor market will be sustained." Nonetheless, Bernanke expressed confidence that the Fed's zero-interest rate policy and other support measures, including the so-called Operation Twist program, will help reduce unemployment over time by promoting economic growth.

Bernanke was addressing the National Association for Business Economics Annual Conference in Washington, DC earlier today.

The euro traded higher against the dollar at $1.3329 on Monday, as compared to $1.3265 late Friday. The euro had scaled a high of $1.3338 intraday with a low of $1.3192.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 79.048 on Monday, down from 79.344 in North American trade late Wednesday. The dollar scaled a high of 79.72 intraday, with a low of 79.01.

In economic news, pending home sales in the U.S. showed an unexpected decline in February, as per a report by the National Association of Realtors on Monday. Nevertheless, pending sales remain notably above the pattern in the first half of last year.

The pending home sales index fell by 0.5 percent to a reading of 96.5 in February after rising 2.0 percent to 97.0 in January. Economists expected the index to increase by 1.0 percent. A pending sale indicates a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

From the eurozone, German business confidence improved to 109.8 in March from 109.7 a month ago, the Munich-based Ifo institute reportedly said. The index stayed above the expected reading of 109.5.

Meanwhile, the current conditions index remained at 117.4. Economists were expecting the index to fall to 117. The expectations index rose to 102.7 from 102.4 in February. The reading matched economists' expectations.

by RTT Staff Writer

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