Current Crude Oil Prices Higher with Fed Announcement

The current crude oil futures prices are slightly up after broad fluctuations that came as soon as the Federal Reserve made its announcement of a fresh bond-buying program.

In the NYMEX, crude oil futures prices for October moved up and down within a $2 per barrel range. The prices increased by over $1 when the news of the Federal Reserve came out. They then dropped slightly before obtaining small increases.

The crude price per barrel reached its highest in four months, at $98.58, way before the Fed’s action. However, prices never came back to that level following the news.

The recent crude price per barrel was 87 cents higher, at $97.88.

During the announcement of the Fed, which came after months of cautious signaling, its committee said that it will make a monthly purchase of agency mortgage-backed securities, amounting to $40 billion, on an unlimited basis.

Moreover, it said that the purchases will be extended to more assets in case there is no improvement in the job market.

Summit Energy analyst Mr. Matt Smith said that it is a strong shot with the commitment of even stronger shots in the future. Early fluctuations showed the “bad news is good news” tactic at work. There were high hopes from the market and this is already everything that it is seeking for with interest rates close to zero at least until the middle parts of 2015, among several ways to boost a risk-on appetite.

The analyst further said that the current crude price may reach over $100 per barrel in the days to come as the market absorbs the total effect of the plan.

By: Chris Termeer