Oil awaits Fed rate decision
Open demo account
FOREX trading implies serious risk and can result in the loss of your invested capital

Financial and commodity markets analytics

The oil price rebounded in late trading on Monday after falling earlier in the session on the back of increased drilling in the US.

Oil drillers in the US added new rigs as they face up to the new reality that oil may be US$50 or lower for some time and have adjusted their techniques accordingly to remain profitable.

"Each dollar is being used far more efficiently and, as a result, $50 oil appears much more palatable," Barclays bank said in a note to clients.

There is also a lot of skepticism in the market about rumours that Opec and non Opec members will agree to freeze production when they meet later this month with Iran refusing to make any cuts in order to make up for lost time suffered under western sanctions.

The oil price is expected to remain volatile in the lead up to next week’s interest rate decision from the US Federal Reserve with chances of a rate hike growing by the day which if happens, is expected to hit the oil price hard.

Oil is priced in US dollars and becomes more expensive for holders of other currencies if the greenback strengthens.

“Crude prices have generally come under pressure recently as the likelihood of an interest rate hike from the Federal Reserve later this month has increased, in turn weighing on prices,” said Robbie Fraser, commodity analyst at Schneider Electric. 

The material published in on this page is produced by the FIBO group companies, and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC; furthermore it has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

Analyst

The world of trading has no boundaries

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 58% of retail investor accounts lose money when trading CFDs with this broker. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

IMPORTANT: Please be informed, that our services are available for Professional Clients only. Our website is currently under review for the implementation of the correspondent amendments.

Important notice
By clicking "Continue" you will be redirected to the website operated by FIBO Group, LTD company registered in BVI and regulated by FSC. Please familiarize yourself with the Customer Agreement through the link. Click "Cancel" to remain on this page.