CNBC Oil Settles Above $51 on Fed's Move, Weak Dollar

Oil jumped more than 7 percent Thursday to top $51 a barrel after the U.S. Federal Reserve announced a new plan to fight recession and a weak dollar boosted the appeal of commodities to investors.

"It's all about the Fed move,'' said Tom Knight of Truman Arnold. "[The] weaker dollar supports higher dollar-denominated oil [and other commodity prices] and fuels inflation fears, too.''

The Fed said Wednesday it will purchase $300 billion of long-dated Treasuries over the next six months, its first large-scale purchases of government debt since the early 1960s, while also boosting buying of mortgage-backed securities and agency debt in its bid to rescue the economy.

The U.S. dollar extended a sharp sell-off Thursday, a day after posting its biggest one-day loss against a basket of currencies since at least 1985.

The lower dollar supported other commodities, with the Reuters-Jefferies CRB index, a global commodities benchmark, hitting a five-week high Thursday. more...