Cameron Hanover – Daily Energy Hedger – August 30, 2010

Oil prices were higher again on Friday, in a renewed frenzy of risk appetite, as Fed Chairman Ben Bernanke gave investors the signal they had been looking for. Speaking from Jackson Hole, Wyoming, he essentially told investors that the Fed will step in if the economic recovery appears to be in serious trouble. As a result of his comments, traders and investors dumped the US dollar, which is considered a “safe haven,” and they bought equities and commodities, including oil. The fact that prices were still oversold and near support certainly did not hurt. Traders saw buying oil as a low-risk purchase, and then the Fed seemed to guarantee it.