Commodity Daily News

Crude Oil Prices Climb after USD Takes a Hit

Crude Oil prices gained almost 9% yesterday as the Dollar posted its biggest one-day drop following the U.S. interest rate cut. Crude Oil prices surged to almost $69 a barrel as the weak Dollar and data from the U.S. government showed crude stocks rose less than expected last week and gasoline supplies fell unexpectedly.

The prices appreciated on speculation the U.S. Federal Reserve rate cut will help spur a recovery in the world's biggest fuel-consuming country. Investors often purchase Crude Oil, and other dollar-priced commodities, when the U.S. currency drops because of their use as an inflationary hedge. Like other commodities, Oil has become more sensitive to the gyrations of the wider economy as the global financial crisis widens. Moreover, the OPEC cartel decision last week to cut output by 1.5 million barrels per day, as well as hints that it may cut production further, have also helped to stabilize Crude Oil prices in the market.