The price of oil surged to $101 per barrel Wednesday, as the U.S. and other countries tried to make 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 ramp up the world's second-largest economy.
Stock markets soared while the dollar sank in morning trading. Major U.S. indexes were up more than 3.5 percent. The U.S. Dollar Index, which measures the dollar versus other currencies, dropped 1.1 percent.
Oil, which is priced in dollars, tends to rise as the dollar falls and makes crude cheaper for investors holding foreign currency. The price of benchmark crude rose $1.14 to $100.93 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 crude, rose 35 cents to $110.21 per barrel in London.
The U.S. Energy Information Administration reported that oil and distillate fuel supplies grew more than expected last week. Oil and gasoline demand fell when compared with a year ago, while demand for distillates, which include heating oil and diesel fuel, increased.
Gasoline pump prices are steady 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 at the same time last year.
In other energy trading, heating oil was virtually unchanged at $3.0222 per gallon, and gasoline futures rose 3.77 cents to $2.5775 per gallon. Natural gas fell 7.6 cents to $3.557 per 1,000 cubic feet.