Oil extends gains as Fed keeps stimulus unchanged

SINGAPORE: World oil prices rose in Asian trade Thursday after the US Federal Reserve kept its huge monetary stimulus programme for the US economy intact.

New York’s main contract, West Texas Intermediate for October, added 52 cents to $108.59 a barrel in mid-morning trade after surging $2.65 on Wednesday.

Brent North Sea crude for delivery in November rose 27 cents to $110.87 a barrel, after climbing $2.41 the day before.

Markets had expected the US central bank’s policy setting Federal Open Market Committee (FOMC) to scale down its $85 billion a month bond-buying spree.

But the FOMC said that although the economy appears to be holding up amid government spending cuts, it “decided to await more evidence that progress will be sustained” before deciding to scale down the stimulus package.

“Oil is booming,” said Victor Shum, managing director at IHS Purvin and Gertz energy consultancy in Singapore.

“The Fed has decided to continue its monetary stimulus programme, so that has boosted equities and the commodities markets globally, and certainly including oil futures here in Asia,” he told.