Oil Rises as Federal Reserve Keeps Rates Unchanged
by Bloomberg | Mia Gindis and Alex Longley
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas
Oil rose as a drop in the dollar made the commodity more attractive to importers and the Federal Reserve hinted it might be done raising interest rates, buoying a shaky outlook for crude demand.
West Texas Intermediate settled above $82 a barrel, snapping a three-day losing streak that had sent prices down about 6%. The Fed refrained from increasing borrowing costs on Wednesday and signaled that a recent rise in longer-term Treasury yields reduces the impetus to hike again. Stock markets also rose, and bond yields fell.
“Today is a one-way trade for risky assets, and that has given oil a modest boost,” said Ed Moya, senior markets analyst at Oanda. “Energy traders are growing confident that the Fed is done tightening, given the recent soft labor market readings.”
Oil extended its gains on Thursday after the Wall Street Journal reported that the US has intelligence showing that Russia’s Wagner Group may send air defense weapons to Iran-backed Hezbollah.
Still, crude is trading below pre-war levels as fears the conflict would spread across the region and disrupt oil supplies have so far failed to materialize. Some refugees were allowed to flee the fighting in Gaza and cross into Egypt as part of a Qatar-mediated deal that required agreement between Israel, Egypt and Hamas. US President Joe Biden called for a pause in fighting to free hostages being held in Gaza, but stopped short of supporting a full cease-fire.
The developments have oil options pricing in a smaller risk of escalation and shifting attention to signs the global demand outlook is weakening. Manufacturing in China, the biggest crude importer, moved back into contraction last month.
Prices:
- WTI for December delivery rose 2.5% to $82.46 a barrel in New York.
- Brent for January settlement advanced 2.6% to $86.85 a barrel.
by Bloomberg | Mia Gindis and Alex Longley
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas