NEW YORK: Brent crude oil rose above $108 a barrel on Wednesday, recovering from a three-month low, after the US Federal Reserve signalled it would continue its stimulus programs and on optimism that European policymakers can keep a debt crisis in Cyprus from spreading.
The Federal Reserve wrapped up a two-day meeting on Wednesday by pressing forward with its aggressive efforts to stimulate the US economy, saying it would take into account risks posed by its policies but also how much progress it was making lowering unemployment.
Cyprus was seeking a new loan from Russia to avert a financial meltdown, after the island's parliament rejected the terms of a European Union bailout, raising the risk of default and a bank crash.
Brent crude for May rose $1.27 to settle at $108.72 a barrel. It had dropped nearly 2 percent to a three-month low on Tuesday. US crude for April rose 80 cents to $92.96 per barrel.
"Clearly, market players anticipate that an alternative solution will be found for Cyprus," said Carsten Fritsch, analyst at Commerzbank. "Nonetheless, the uncertainty surrounding this issue is likely to continue to keep oil prices in check in the short run."
Oil prices also rose on Wednesday in the hours after the US Energy Information Administration said crude stocks fell by 1.3 million barrels last week, rather than the 2.0 million-barrel increase analysts had expected. The report showed a drop in US crude imports.
<Center><b><i>Copyright Reuters, 2013</b></i><br></center>
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