Oil rose on speculation about a Fed dovish

Oil prices ended higher this Friday, helped by the prospect of a moderation by the Federal Reserve in the increases in its reference interest rates, and the proximity of the European embargo on Russian oil.

The price of a barrel North Sea Brent for December delivery gained 1.21% to $93.50 in London. While the barrel of West Texas Intermediate (WTI) for the same delivery it gained 0.63% to 85.05 dollars.

“Oil prices end the week in the positive thanks to a new appetite for risk, given the hope that the Fed does not lead the economy into a pronounced recession,” Edward Moya, an analyst at Oanda, summarized in a note.

According to The Wall Street Journal, the Fed Monetary Policy Committee will debate a possible moderation of its monetary tightening cycle, after a new rise of 0.75 percentage points in its guideline rate.

Related Post

The Fed’s Rate Hikes Are Turning Money-Fund Investors Into Winners. Taxpayers Are Missing Out.

September 2, 2023

The Stock Market Has Bounced, But Small-Caps Are Lagging. What That Means. 

August 26, 2023

Nvidia Beats Big, and Powell Doesn’t Rock the Boat. Why That’s Ominous for Stocks.

August 26, 2023

The Fed Will Disappoint Wall Street and Main Street

August 5, 2023

Investors revised their forecasts and now the majority think that the reference rate will not go beyond 5% in 2023, an issue that became central in the market this week.

The perspective of a Fed with the less heavy hand, he reassured the markets, which turned to stocks and released pressure on the rates of US bonds and the dollar. That pushed up oil, which became cheaper for investors in other currencies as the greenback weakened.

To Andy Lipow, from Lipow Oil AssociatesCrude oil was also supported by the prospect of the European embargo on Russian exports coming into force in early December.

“It seems that at least 700,000 barrels of Russian oil are delivered by sea to Europe” at the moment, he explained. “The market is trying to determine whether Russia will be able … to deliver it” elsewhere, “mainly China and India.”

On Friday, analysts at Barclays lowered their Brent price forecasts slightly, but still see it around $100 a barrel by the end of the year.

rrg