BANGKOK – Oil prices rose above $99 a barrel Friday in Asia after the U.S. Federal Reserve announced a plan to jolt the U.S. economy and unrest in the Middle East heightened concerns about supply.
Benchmark oil for October delivery was up $1.40 at $99.71 per barrel at late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract closed at $98.31, up $1.30, on Thursday.
Brent crude was up $1.61 cents at $117.49 a barrel on the ICE futures exchange in London.
The Fed said it will spend $40 billion a month to buy mortgaged-back securities for an indefinite period. The purchases are intended to lower long-term interest rates to spur borrowing and spending.
The Fed also extended a plan to keep short-term interest rates at record-low levels through to mid-2015, as it attempts to boost an economy it says is too weak to reduce high unemployment.
Expectations of action by the Fed, as well as the European Central Bank and China's government, have balanced gloomy economic news and kept oil in a narrow range the past few weeks.
Oil analyst Stephen Schork said in a commentary that the Fed decision, was tantamount to "flooding the market with dollars." Because oil is traded in dollars, holders of currencies stronger than the dollar would buy it, causing its value to go up.
Traders on Friday also kept a close eye on unfolding unrest in the oil-rich Middle East.
Protesters stormed the U.S. Embassy compound in Yemen's capital Thursday. Ongoing clashes have been taking place around the U.S. mission in Cairo, and the U.S. ambassador to Libya was killed Tuesday.
In other Nymex trading, gasoline was up 5.6 cents at $3.018 a gallon and heating oil added 4.1 cents to $3.252 a gallon. Natural gas fell 1.1 cents to $3.048 per 1,000 cubic feet.