Oil prices soar beyond US$75

Oil prices soared beyond 75 dollars per barrel on Friday after US central bank chief Ben Bernanke managed to soothe growth concerns in the world’s largest oil consuming nation.

New York’s main contract, light sweet crude for October delivery, jumped 1.81 dollars to 75.17 dollars a barrel, marking a the third straight session of gains.

London’s Brent North Sea crude for delivery in October gained 1.63 cents to 76.65 dollars per barrel.

“The market is reacting to the comments that Bernanke made this morning saying that the Federal Reserve would be there if the economy showed more signs of distress,” said analyst Andy Lipow of Lipow Oil Associates.

“The stock market rallied as well as oil prices.”

In a highly anticipated speech, Bernanke said that the sluggish pace of the US economic recovery and employment was weaker than expected by the Federal Reserve.

He nevertheless said that prospects for a US growth pick-up in 2011 appeared to “remain in place” despite a sharp cutback in the pace of second quarter economic expansion.

He further said the Federal Reserve will take more “unconventional” steps to boost growth if the economic outlook “deteriorated significantly.”

Such measure could include pumping cash into the US economy, which would lower the dollar’s value and make oil a more attractive commodity.

“If they were to act to support the economy it would maintain a constant level of oil demand,” said Lipow.

The US government slashed second quarter growth in the world’s largest economy to a pace of 1.6 percent, signalling a more pronounced slowdown in the recovery from recession.

The Commerce Department said that gross domestic product growth in the April-June period fell from 3.7 percent in the first quarter on the back of a massive trade deficit and weak private inventory investment.

It was sharply lower than the annualized 2.4 percent projected earlier by the government, but came a shade higher than expected by most economists who had expected GDP growth to be shaved by nearly half to 1.4 percent.

Oil rose slightly on Thursday on the back of a decline in new US weekly claims for jobless benefits as well as a weak dollar, traders said. -