Crude prices jumped on Friday after Federal Reserve Chairman Ben Bernanke said the central bank was ready to act to help boost the economy, although he didn't signal any immediate easing policy.
In a highly-anticipated speech at the Fed's annual symposium in Jackson Hole, Bernanke described the current U.S. economic situation as "far from satisfactory," and left the door open for additional stimulus plans.
After reading through the details of the speech, many analysts believed that another round of quantitative easing was almost a done deal, although it might not come anytime soon.
"After Bernanke's speech, the European Central Bank will also follow with boosting actions," said Raymond Carbone, president of oil brokerage Paramount Options.
Expectations for major central banks' new stimulus plans lifted market sentiment and pushed up commodity prices.
Meanwhile, the U.S. dollar fell after the Bernanke speech. The dollar index, which tracks the greenback's performance against a basket of currencies, dropped about 0.5 percent. A weakening dollar was also supportive to the dollar-denominated crude oil.
On the economic front, a string of positive U.S. data released on Friday also boosted the market. U.S. factory orders for July jumped 2.8 percent, the biggest increase in 12 months. And the Thomson Reuters/ University of Michigan consumer sentiment index rose to 74.3 in August from the previous reading of 73.6.
Crude prices got further support from reports that Germany and Italy opposed a release of strategic oil reserves. Recently, markets have been closely watching the talks among western countries about tapping the oil reserves.
The financial ministers of the Group of Seven countries once expressed concerns about the rising oil prices. They said that they would push for a reserve release to cope with Iran's export declines due to the Western sanctions.
Light, sweet crude for October delivery surged 1.85 dollars, or 1.96 percent, to settle at 96.47 dollars a barrel on the New York Mercantile Exchange. It posted a fifth straight weekly gain of 32 cents, or 0.33 percent.
In London, Brent crude for October delivery also rose sharply and last traded above 114 dollars a barrel, also heading to a weekly gain.