Oil prices soar worldwide.
Fed Reserve contributes: Interest rates unchanged
Thursday brought about an upward movement in the global prices of oil following up the trend seen on Wednesday. The following few factors contributed according to experts:
1. The fall in the United States stockpiles experienced a fall in excess of the projected figures,
2. The United States Federal Reserve kept the interest rates unchanged leading to a fall in the rate of the dollar.
It did rally around later on Wednesday; it dropped by over six million barrels. This figure of inventory levels projected by the US Department of Energy was less than half of this decline.
It meant that the United States Economy experienced a spurt in unexpected demand somewhere.
While this decline in the US stockpiles will work towards alleviating concerns of an impending glut in the market stockpiles, it will also support the prices of the crude oil according to a note sent by Margaret Yang, market Analyst of the CMC Markets.
On Wednesday, the position at the stroke of 03:00 GMT stood at:
Brent Crude: climbed 48 Cents to reach $ 47.31 which was to the tune of about 2%; the other contract, U.S. benchmark West Texas rose by a similar margin of 2% to stabilize at $ 45.79 after a gain of 45 Cents to stabilize at $ 45.79.
The weakness of the dollar gave the two contracts further impetus. This is an advantage for people using other currencies since it makes the oil cheaper for them.
But, the greenback suffered another setback due to the announcement by the US Federal Reserve that the health of the economy was sound and improving. They admitted that a case for increase in the interest rates might be made out even in the current scenario.
But, the Fed reserve opined that there were some more evidences of sustained growth that would be required. Only then would a convincing justification exist to go in for a considered raise in interest rates.
Hence, the increase in the interest rates would have to wait. This reasoning and the resultant action hailed as a wise decision across the world.
The result was that the low level of interest rates prompted high-yield commodities and equities skywards. Another piece of information added impetus to the markets.
It said that Iran, Saudi Arabia and Qatar had a meeting in Vienna to propose cuts in production levels. The meeting of oil producers under OPEC and others meet next week at Algeria.
Iran blocked capping of production in April last quoting its backlog in production due to years of sanctions.
Umrao singh umraoz.wordpress.com
Thursday, 22 September 2016
Written for: Lars-Magnus Carlsson www.thephilippinepride.com?utm_source=rss&utm_medium=rss
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