Oil extends gains above $80 per barrel

The contract advanced USD 1.14 in overnight US trade after comments by Federal Reserve chairman Ben Bernanke helped weaken the dollar,making dollar-priced oil less expensive for buyers using stronger currencies.

London’s Brent North Sea crude for April delivery gained 11 cents at USD 78.20 a barrel.

Bernanke yesterday said the US central bank would hold interest rates low for an extended period as the economic recovery gets on track.

The Fed chairman told the House of Representatives Financial Services Committee that he saw unemployment remaining stubbornly high,which will require the Fed to maintain its stimulative monetary policy.

Clarence Chu,an oil trader with Hudson Capital Energy in Singapore,said however it would be difficult to sustain oil prices at more than USD 80 a barrel,given that global supplies still outpace demand.

“Sentiment has been bullish over these past couple of days,” Chu said.

“But it hasn’t been supported by the fundamentals. So I don’t think oil will be supported at USD 80 for the short term.”