Oil rises above $83 as investors look to Fed moves

SINGAPORE: Oil prices rose above $83 a barrel on Monday in Asia as investors bet the US central bank will soon take action to bolster a weak economic recovery.

Benchmark oil for November delivery was up 66 cents to $83.32 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose 99 cents to settle at $82.66 on Friday.

Investors are anticipating that a weak September employment report will push the Federal Reserve at a meeting next month to buy Treasury bonds and take other measures known as quantitative easing to lower long-term interest rates and spur lending.

Private employers added 64,000 workers last month, short of the 75,000 economists expected, the government said Friday. Overall, 95,000 jobs were slashed as governments laid off temporary workers and the unemployment rate held steady at 9.6 per cent.

"Once investors started seeing the jobs data in terms of quantitative easing rather than as a sign that the economy has really run out of all its forward thrust, oil prices advanced," Cameron Hanover. "The economy is so anemic, investors are taking heart that the Fed will help."

In other Nymex trading in November contracts, heating oil rose 1.42 cents to $2.296 a gallon and gasoline gained 1.24 cents to $2.164 a gallon. Natural gas dropped 1.9 cents to $3.632 per 1,000 cubic feet.

In London, Brent crude added 57 cents to $84.60 a barrel on the ICE Futures exchange.