So, the market got it right and the Fed decided that rates would stay unchanged, having said what they did it looks like next year now before they think again. And it is what they said that caused the oil market to move so sharply after the announcement. Initially crude rose sharply as the idea of a weaker dollar excited traders but when the release was read to them it transpired that the reason that there was no change was because of worries about world economic growth. The Fed also stated that low oil prices ‘are a negative, especially for emerging markets’ and were not worried so much about the greenback.
On the downside Kuwait poured more cold water on any recovery by saying that whilst they were ‘confident that the oil market would balance itself, but that this would take time’ thus not showing any support for change, at least until the December 4th meeting. The fact that prices will probably end modestly up on the week is more of analysts reading into the three reports that have come out recently. As reported here, if you believe in the EIA or Opec you have to remain bearish, if you think that the IEA are right things do look quite a lot better for next year. Technically we had a go at $48 WTI but need to breach it properly before the next leg of a potential bull market is established.