Churn And Burn: Why Oil’s Waiting On The Fed

on September 17, 2015 at 2:00 PM

Tanker Carries Shipment Of Post War Oil From Iraq

There has been plenty of volatility in the oil price this year, but the general direction of travel has been only one way – down.

After a close to 6 percent rise in the WTI oil price to $47.15 on Wednesday, traders are increasingly optimistic that oil may have hit its lowest level of the recent cycle in August, when it fell to $37.75.

“The present price action on WTI still suggests to us that a turn is developing,” Citi analysts, who have been bullish on the commodity for some time, argued in a research note Thursday morning.

Wednesday’s leap in the price was motivated by several different factors: reports that U.S. crude inventories fell in the most recent week; increased concerns about U.S. involvement in the Middle East and, as with much of the rest of the market, second-guessing whether the U.S. Federal Reserve (Fed) will move to hike interest rates for the first time in more than a decade on Thursday.

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