A barrel of crude oil on the New York market briefly reached a new record price, exceeding 81 dollars, in anticipation that the U.S. central bank, the Fed, would cut its key interest rate later in the day to stimulate the economy and gasoline demand from the world’s largest energy consumer.
After briefly reaching a level of 81.24 dollars earlier in the day, a barrel of crude oil on the New York market rose by a total of 16 cents to 80.73 dollars on Tuesday. The day before, it reached a closing high of 80.57 dollars, increasing by 1.47 dollars. At the same time, on the London market, oil fell by 4 cents to 76.94 dollars. Investors expect the Fed to lower its key interest rate by at least a quarter of a percentage point to 5 percent to ease pressures on the U.S. credit market. “The market will wait to see how much the Fed will lower interest rates and whether it will provide any indications regarding the possibility of further cuts in its statement, which will affect the outlook for U.S. economic growth and oil demand,” said David Moore, commodity strategist at the Commonwealth Bank of Australia in Sydney. “In the background, there are quite constrained oil markets. U.S. government data has shown a continuous decline in inventories in recent weeks,” he added. He stated that he does not see any concrete catalyst for the price increase on Monday. “However, once they started to rise, they gained momentum, and that is likely why there was such a sharp increase,” he assesses. Besides economic concerns, markets have been troubled in recent weeks by worries about supply security and demand. Last week, oil prices surged after Hurricane Humberto disrupted power supply in Texas, temporarily taking several refineries offline. (H)
