Oil Rises on Fed’s Optimistic Outlook

West Texas Intermediate crude rose for a second day after the Federal Reserve said it will reduce stimulus as the nation’s economic outlook improves and as U.S. fuel consumption increased.

Prices gained as much as 0.9 percent. The Fed is trimming its monthly bond purchases, “reflecting cumulative progress and an improved outlook for the job market,” Chairman Ben S. Bernanke said at a press conference yesterday. Total U.S. petroleum demand increased last week to the most since 2008, according to the Energy Information Administration.

“The Fed signaled that the economy is in a better shape than people had thought, and that’s bullish for crude oil,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “Stronger demand is suggesting that consumers are actually spending.”

WTI for January delivery, which expires today, rose 86 cents, or 0.9 percent, to $98.66 a barrel at 11:37 a.m. on the New York Mercantile Exchange. The more-active February contract gained 85 cents to $98.91. The volume of all futures traded was 35 percent below the 100-day average.

via Bloomberg

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.