U.S. Dollar Weakens, Oil Prices Rise

Crude oil rose for a second day in New York, Thursday (12/04/2012) local time as shares of United States (U.S.) and rising U.S. dollar weakened against the euro on speculation that central banks will stimulate economic growth by monetary policy.

The price of West Texas Intermediate crude oil for delivery in May 94 cents to 103.64 dollars per barrel on the Nymex. Meanwhile, Brent crude oil for May also setting up 1.53 dollars, or 1.3 percent, to 121.71 dollars per barrel on the ICE Futures Europe exchange in London. "Stimulus plan will probably be on the table again and it certainly supports for commodities," said Tom Bentz, director of BNP Paribas Prime Brokerage Inc., in New York on Thursday.

Deputy Governor of the Federal Reserve (the Fed), Janet Yellen, signaled that borrowing costs will likely remain low until 2014 as the Fed loses its target for full employment and keeping inflation to remain subdued. This step has been confirmed by the Fed last month, and was first announced by the Fed in January 2012, at which the central bank will keep interest rates near zero percent through 2014 with economic considerations will not change much in the future.

Elsewhere, The Bank of Japan Governor Masaaki Shirakawa on Thursday, said the bank will pursue a "powerful easing" in order to overcome deflation. Because of the steps the central bank, the Standard & Poor's 500 index rose 1.4 percent. Meanwhile, the U.S. dollar weakened 0.8 percent against the euro. The weakening U.S. dollar provide a positive sentiment for commodities as an alternative investments other than U.S. currency. "We are moving in tandem with stocks," added Tom.