Saudi comments, Fed expectations push oil higher

A combination of factors helped boost the price of crude oil on Tuesday, with the U.S. mid-term elections as a dramatic backdrop. The more immediate stimulus is the expectation that Federal Reserve chairman Benjamin Bernanke will announce tomorrow a new asset buying or "quantitative easing" program designed to stimulate the U.S. economy by injecting liquidity.

One effect of that move will be a de facto devaluation of the greenback, which in turn results in crude that's more expensive for Americans.

The second driver came from comments by Saudi oil minister Ali Naimi, who said at an Opec meeting that crude oil was trading in a "comfortable" range of $70 to $90 per barrel. That marks a subtle but important shift from Naimi's previous comments about a $70 to $80 per barrel range, and it suggests that exporters, producers and consumers must settle in to a new normal.

The price of crude oil probably has more impact on supply chains and logistics than that of any other commodity, because petroleum is the fuel for nearly every step of the economic and manufacturing process. Crude oil and its refined products provide fuel, light, heat and the raw materials for almost every product created in the modern economy, and a more expensive barrel means higher costs at every point along the line.

Brent crude oil futures rose 0.67 percent to trade at $85.91 per barrel, while West Texas intermediate light, sweet crude oil futures gained 0.84 percent to trade at $83.56 per barrel.