Oil rises slightly as Fed sticks with low-interest policy; pump price rises

NEW YORK, N.Y. – The price of oil rose Wednesday as U.S. Federal Reserve officials signalled that they’ll keep interest rates at historically low levels and maintain other measures meant to stimulate economic growth.

Benchmark oil for April delivery gained 80 cents to finish at US$92.96 a barrel on the New York Mercantile Exchange.

Brent crude, used to price many kinds of oil imported by U.S. refineries, rose $1.27 to end at $108.72 a barrel on the ICE Futures exchange in London.

Federal Reserve Chairman Ben Bernanke said at the end of a two-day policy meeting that the U.S. economy has shown improvement in recent months, but the Fed won’t alter its aggressive stimulus policies until it is convinced the gains can be sustained.

Bernanke repeated that the Fed plans to keep its key short-term interest rate near zero until the unemployment rate is below 6.5 per cent. It is currently at 7.7 per cent.

Earlier the U.S. Energy Department said the country’s crude oil supplies declined last week by 1.3 million barrels, or 0.3 per cent, to 382.7 million barrels, which is 10.5 per cent above year-ago levels. Analysts were expecting supplies to increase.

At the gas pump the average price for a gallon in the U.S. rose to $3.70. That’s still down three cents from a month ago and 15 cents below the price at this time last year.

In Canada, the price at the pump averaged C$1.289 per litre, according to GasBuddy.com.

In other energy futures trading on the Nymex:

—Wholesale gasoline rose seven cents to finish at $3.12 a gallon.

—Heating oil rose three cents to end at $2.89 a gallon.

—Natural gas fell one cent to finish at $3.96 per 1,000 cubic feet.

___

Pamela Sampson in Bangkok and Pablo Gorondi in Budapest contributed to this report.

(TSX:ECA, TSX:IMO, TSX:SU, TSX:HSE, NYSE:BP, NYSE:COP, NYSE:XOM, NYSE:CVX, TSX:CNQ, TSX:TLM, TSX:COS.UN, TSX:CVE)