Oil jumps past $101 a barrel on view that the Fed will slash rates

Oil futures rallied again Wednesday, pushing briefly past $101 a barrel after the Federal Reserve lowered its forecast for US economic growth this year, convincing energy investors that the central bank will slash interest rates further. The Fed said damage from the housing slump and problems in the credit markets will slow economic growth to between 1.3 percent and 2 percent this year, down from a previous forecast for GDP growth of between 1.8 percent and 2.5 percent. Oil investors can interpret such news in one of two ways: Selling on concerns that the economy, and thus demand for oil, is cooling; or buying on the prospect that interest rates will fall, weakening the dollar and feeding new buying of oil futures. On Wednesday, they definitively chose the latter view. "The Fed was ... the catalyst to get us going here," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago.