Oil pares gains after ECB bond buying decision

[LONDON] Oil prices pared gains on Thursday after the European Central Bank (ECB) said it would start buying government bonds, a move which could push the dollar to new highs and put downward pressure on commodities.

Exceeding market expectations, ECB President Mario Draghi said the bank would buy 60 billion euros (US$69.34 billion) of government bonds a month until the end of September 2016 to support the flagging eurozone economy.

Brent crude futures traded at US$49.67 a barrel by 1345 GMT, up 64 cents. US crude was up 32 cents at US$48.30. Earlier in the session, Brent had reached a high of US$50.45, up US$1.42.

Expectations for the stimulus programme have pressured the euro and sent the dollar, seen as a safe haven, soaring.

A strong dollar, buoyed by an expected US interest rate hike and an American economy that is growing while Europe and Asia slow, dents demand for dollar-priced commodities by making them expensive for holders of other currencies.

Oil prices have already more than halved since June last year due to oversupply and a fall in global demand.

REUTERS