Oil futures soared on Wednesday, fueled by a decline in supply and the Fed's decision not to taper yet.
The December oil contract gained 2.5 percent to settle at $108.07 a barrel on the New York Mercantile Exchange.
The jump in the price of oil will be a blessing for some Australian stocks such as oil producers like Woodside Petroleum (ASX: WPL) and Santos (ASX: STO), but will impact the airlines such as Qantas (ASX: QAN) which will be hit with higher fuel bills.
The Federal Reserve unexpectedly refrained from reducing the $85 billion pace of monthly bond buying, saying it needs to see more signs of lasting improvement in the economy.
“The Committee decided to await more evidence that progress will be sustained before adjusting the pace of its purchases,” the Federal Open Market Committee said at the conclusion of a two-day meeting in Washington today.
“Asset purchases are not on a preset course, and the committee’s decisions about their pace will remain contingent on the committee’s economic outlook as well as its assessment of the likely efficacy and costs of such purchases,” according to the statement.
Meanwhile, a government report showed that U.S. crude stockpiles fell to the lowest level since March 2012 and supplies at Cushing, Oklahoma, the delivery point for WTI, dropped an 11th week.
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