LONDON, September 18, 2008 (AFP) – Oil prices extended gains on Thursday as the dollar fell following a coordinated plan by major central banks around the world to boost liquidity amid a credit crunch.
“The coordinated move by central banks has seen the dollar sold off and has sparked some interest in the dollar denominated commodities like oil,” said Sucden analyst Nimit Khamar.
A weak dollar makes oil cheaper for buyers holding stronger foreign currencies.
New York’s main contract, light sweet crude for delivery in October, jumped 1.34 dollars to 98.50 dollars a barrel.
London’s Brent North Sea crude for November rose 99 cents to 95.83 dollars a barrel.
The US Federal Reserve on Thursday announced a 180-billion-dollar (125-billion-euro) cash line to fight the global crisis as part of a joint campaign with other leading central banks. Crude oil prices had surged by about six dollars on Wednesday after the US government’s lifeline to insurance giant AIG failed to reassure skittish traders and prompted a rush into commodities as a haven from the financial market storm.