(New York) Oil prices ended sharply higher on Thursday, stimulated by profit-taking by speculative operators and the attraction of investors for risky assets, the day after an easing by the American central bank (Fed).
The price of a barrel of Brent from the North Sea for delivery in February appreciated by 3.16%, to close at $76.61.
As for a barrel of American West Texas Intermediate (WTI), due in January, it increased by 3.03%, to $71.58.
“The markets are celebrating the Fed’s openness to future rate cuts,” commented José Torres of Interactive Brokers.
On Wednesday, the president of the institution, Jerome Powell, admitted that the question of reducing the key rate was now being debated within the Fed.
The central bankers’ change of direction suggests “much more accommodating financial conditions”, which benefits all raw materials, black gold in the first place.
The weakening of the dollar, undermined by the prospect of rate cuts, also supported the acceleration of oil, the majority of contracts being denominated in greenbacks.
For Stephen Schork, of Schork Group, the jump in prices is mainly due to “profit taking”.
According to him, speculative players who have been positioned on the decline for several weeks have bought back oil to hedge. They thus pocketed the difference between the price at which they had committed to sell and the current price, which is significantly lower.
The extent of the movement recorded on Thursday is also due, for the analyst, to the approach of the holidays which reduces volumes and increases volatility.
Crude was also supported by the publication of the monthly report from the International Energy Agency (IEA), which raised its estimate of demand growth in 2024 to 1.1 million barrels per day, compared to 930 000 barrels so far.
But for Stephen Schork, “the market remains fundamentally weakened”. Futures contracts are thus in a so-called “contango” situation, which means that spot prices are lower than those of futures contracts with delivery in several months.
This generally reflects weak demand in the short term.
“The question is whether central banks respond in time” to the deterioration of the economic situation, by easing their monetary policy, “or if it is too late,” questioned Craig Erlam of Oanda.
For him, “the evolution of oil prices could provide insight into the market’s outlook in the weeks to come. »