The price of oil on Wednesday finished trading above $100 for the first time in two weeks, as the U.S. and other countries made it easier for banks to lend money and keep the global economy growing.
The Federal Reserve said it will team up with the European Central Bank, the Bank of England and the central banks of Canada, Japan and Switzerland to increase the flow of dollars around the world. The coordinated move should be a shot in the arm for Europe, where a festering credit crisis has slowed the eurozone economy and threatened a recession.
Separately, China reduced the level of cash its banks are required to keep on hand in an effort to boost lending and keep the world's second-largest economy going strong.
Benchmark crude rose 57 cents to finish at $100.36 per barrel in New York. At one point it was as high as $101.75 a barrel. Brent crude, used to price many foreign kinds of oil, rose 12 cents to end at $109.98 per barrel in London.
Wednesday's price increases indicate that many oil traders think the global economy will eventually benefit — and oil demand will grow — as more money flows through the banking system. The Fed added more encouraging news in its Beige Book survey released Wednesday. It showed the U.S. economy expanding at a slow but steady pace in most parts of the country.
For now, however, oil and gas demand remains weak. The Energy Information Administration reported Wednesday that U.S. wholesale gasoline demand fell in November to the lowest monthly average since January 2004.
"That was rather disappointing, given that last week included a holiday weekend," independent analyst and trader Stephen Schork said.
American motorists have been driving less with retail prices well above seasonal record levels.
Gasoline pump prices are holding at a national average of $3.295 a gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular is about 15 cents cheaper than it was last month, but it's still 44 cents more than it was a year ago.
The government reported Wednesday that oil and gasoline supplies grew last week, as imports rose and refineries slowed down because of weak demand. The weak supply and demand numbers kept oil prices from rising further.
In other energy trading, heating oil was virtually unchanged to end at $3.0214 per gallon, and gasoline futures rose 2.86 cents to finish at $2.5677 per gallon. Natural gas lost 8.3 cents to end at $3.550 per 1,000 cubic feet.
Copyright 2011 The Associated Press.