Oil pares gains after ECB bond buying decision

LONDON (Reuters) - Oil prices pared gains on Thursday after the European Central Bank (ECB) said it would start buying government bonds, a move which could push the dollar to new highs and put downward pressure on commodities.

Exceeding market expectations, ECB President Mario Draghi said the bank would buy 60 billion euros ($69.34 billion) of government bonds a month until the end of September 2016 to support the flagging euro zone economy.

Brent crude futures traded at $49.67 a barrel by 1345 GMT, up 64 cents. U.S. crude was up 32 cents at $48.30. Earlier in the session, Brent had reached a high of $50.45, up $1.42.

Expectations for the stimulus programme have pressured the euro and sent the dollar, seen as a safe haven, soaring.

A strong dollar, buoyed by an expected U.S. interest rate hike and an American economy that is growing while Europe and Asia slow, dents demand for dollar-priced commodities by making them expensive for holders of other currencies.

Oil prices have already more than halved since June last year due to oversupply and a fall in global demand.

($1 = 0.8654 euros)

(Additional reporting by Henning Gloystein in Singapore,; Editing by Christopher Johnson and Susan Thomas)

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