Oil jumps on weak dollar after Bernanke

By Julianne Pepitone, staff reporter

NEW YORK (CNNMoney.com) -- Oil prices rose Wednesday on a weaker dollar after Federal Reserve chairman Ben Bernanke told Congress that interest rates will stay low for "an extended period."

What prices are doing: Crude oil for April delivery rose $1.14 to settle at $80 a barrel Wednesday.

Click the chart view prices for other commodities.

What's driving prices: On Wednesday morning Bernanke testified about monetary policy before the House Financial Services Committee. He said government action has helped kickstart a recovery, but major concerns including the state of the labor market persist.

Echoing past Fed statements, Bernanke said the federal funds rate -- the central bank's primary tool for monetary policy -- is likely to stay low for an extended period. The comments sent the dollar lower against a basket of currencies.

A softer greenback tends to boost the prices of crude oil and other commodities, as they are sold in U.S. dollars around the world.

Also on Wednesday, the Energy Information Administration's weekly report said crude stocks rose by 3 million barrels last week. But that data went against a report from the American Petroleum Institute released late Tuesday, which said crude supplies fell by 3.1 million barrels.

What experts are saying: "The action on oil has been pretty great overall for the past few weeks," said James Cordier, president at Liberty Trading Group.

Crude prices have met resistance at the $80 level, Cordier said, and he expects prices to remain in the high $70s mark for the short term.

"In the medium-term, though, it's going to break through that resistance," he said. "It won't make it to $90, but within one to two months we could see prices ending around the $82-$85 level."

Gas prices: The national average price for a gallon of regular unleaded gasoline rose for the sixth straight day, to $2.678, up 1.8 cents from the previous day's price of $2.660, according to motorist group AAA. To top of page

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