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NEW YORK - Oil prices leapt higher Wednesday, boosted by a weakening dollar and some bullish elements in the US government's weekly oil inventories report.
New York's main futures contract, light sweet crude for April delivery, advanced 1.14 dollars to close at 80 dollars a barrel. The action nearly wiped out Tuesday's loss after five consecutive sessions of gains.
In London, Brent North Sea crude for April delivery gained 84 cents to settle at 78.09 dollars a barrel.
The New York market rose in tandem with Wall Street stocks after comments by Federal Reserve chairman Ben Bernanke helped weaken the dollar, making dollar-priced oil less expensive for buyers using stronger currencies.
Bernanke, in his semiannual report to Congress, signaled the US central bank would need to keep its key federal funds rate range at a historic low near zero for an extended period because of the fragile recovery from recession.
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.
The market also found reasons to buy in the US Department of Energy's mixed weekly oil inventories report.
"The US weekly data release shows some slightly improved demand indications, although the overall inventory overhang has remained stubbornly high," said Paul Horsnell at Barclays Capital.
The DoE said crude reserves jumped by three million barrels last week in the United States -- the world's biggest energy consuming nation -- suggesting weak demand.
But gasoline inventories unexpectedly fell, to 900,000, instead of the rise of 500,000 barrels the market expected, supporting crude futures prices.
"If the bounce in US gasoline demand persists, this may represent the beginning of an extended period of outperformance for gasoline over other oil products as vehicle miles traveled progressively increase in both the US and Chinese markets," said Nic Brown at Natixis.
Traders also tracked events in France, where workers at several refineries ended a strike that has run fuel pumps dry, after winning concessions from oil giant Total in a dispute over cuts in the sector.
Total is ranked as the sixth biggest oil company in the world by sales and is France's biggest company by market capitalization.
Total made a formal agreement with unionized workers that it would not shut or sell its refineries in France in the next five years -- but the accord does not cover the plant at the heart of the strike, in Dunkirk, northern France.
The fate of the Dunkirk refinery remains to be decided at a works committee meeting on March 8, and the CGT and other unions warned they may strike again at that date.
- AFP /ls
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