Fed report keeps oil investment up
Crude oil futures managed a minor upturn on the commodities market today on the strength of a fresh report from the US Federal Reserve, which promised to keep interest rates at near zero value at least for the next 24 months. The announcement bolstered confidence in higher risk commodities, with crude traders taking it as a cue to invest in oil.
West Texas Intermediate for delivery in June rose 57 cents to $104.12 per barrel in New York commodities trading. Brent prices gained 78 cents and settled at $118.94 per barrel on the ICE market in London.
The oil commodity displayed its typical volatility, swinging between green and red for the better part of the morning. However, the Fed’s Open Market Committee decision to keep non-existent interest rates through and into 2014 made for peak oil investment conditions for the day.
Yet the gains posted by crude were limited in the face of other bearish factors. The latest report from the Department of Energy shows higher than first predicted increases in the nation’s fuel inventories. Iran’s negotiations with Russia regarding its nuclear program, and the potential for the lifting of euro zone embargoes also tapered off oil investment.
The geo-political tension surrounding Iran’s nuclear program have been crucial in keeping a second bottom under crude futures for the past months, and when that bottom is removed, traders will likely be pressured to abandon the risky commodity. Though crude oil investment has been on the rise lately, it is always difficult to predict where the fluctuating fuel will go next, even without so many wavering affecting factors at play.