* Bernanke says more growth needed to improve job picture
* Gasoline futures lead oil complex higher
* Coming up: API oil data 4:30 p.m. EDT Tuesday
(Adds trading volumes in paragraph 11)
By Robert Gibbons
NEW YORK, March 26 Oil rose on Monday as
comments from U.S. Federal Reserve Chairman Ben Bernanke
reinforced expectations that interest rates will be kept low.
Those comments bolstered markets and weakened the dollar.
Bernanke said accommodative monetary policy would support
demand and, over time, drive down long-term unemployment. That
underscored views that an easy monetary policy would remain in
place for some time, which fanned expectations for more
Previous rounds of Fed asset purchases have weakened the
dollar and boosted commodities and stocks.
U.S. stock indexes rose 1 percent after Bernanke's comments.
Crude earlier found support from an unexpected improvement
in German business sentiment, which rose for a fifth straight
month in March.
"The Bernanke comments and the overnight German confidence
reading were on the plus side, but without further Iran and
North Korea jitters, the positive economic news is more than
priced in," said John Kilduff, partner at Again Capital LLC.
Geopolitical concerns, especially about the potential
disruption of Iranian crude supplies due to Tehran's stand off
with the West over the OPEC nation's nuclear program, have sent
Brent prices up 18 percent this year.
Brent crude gained 52 cents to settle at $125.65 a
barrel after dipping as low as $124.58 a barrel, just above the
20-day moving average of $124.45.
U.S. crude rose 16 cents to settle at $107.03 a
barrel. The intraday lows tested below the U.S. crude 10-day
moving average at $106.45 and the 20-day MA at $106.58.
Trading volumes were lackluster, with Brent turnover 39
percent below its 30-day average, even while it outpaced U.S.
volume that lagged its 30-day average by 59 percent.
On Friday, both Brent and U.S. crude rallied more than 1
percent, as details emerged of the first sizeable drop in Iran's
oil exports as some buyers stopped or scaled back purchases to
avoid Western sanctions.
U.S. RBOB gasoline futures led the complex higher on Monday,
rising nearly 1 percent to settle at $3.417 a gallon, marking
the highest settlement since April 2011.
Concerns about supplies grew after ConocoPhillips
reported a problem with its gasoline making Fluid Catalytic
cracking unit at its Bayway refinery in Linden, New Jersey, over
the weekend. The region is already threatened with supply
shortfalls this summer due to the loss of refineries due to poor
The euro hit its highest against the dollar in three weeks.
The U.S. currency slid to a three-week low against the Swiss
franc and the dollar index weakened.
An unexpected drop in U.S. pending home sales in February
also weighed on the dollar, but helped hem in oil prices.
Developments in South Sudan helped limit oil's price rise on
Monday. On Saturday, South Sudan said it hoped to resolve a
dispute over oil and other outstanding issues with Sudan within
a month or two that has shut in 350,000 barrels per day of the
new nation's production.
Traders were also watching developments in North Korea. U.S.
President Barack Obama told his Chinese counterpart, Hu Jintao,
the United States was open to starting dialogue with North
Korea, but only if it meets international commitments, a senior
White House aide said.
North Korea's plan for a long-range rocket launch next month
has added to geopolitical uncertainty.
(Additional reporting by Zaida Espana and Simon Falush in
London and Florence Tan in Singapore; Editing by Matthew
Robinson, David Gregorio and Bob Burgdorfer)