Oil prices rebound from 1-mth low as rate hike doubts dent dollar
Investing.com-- Oil prices jumped from a one-month low in Asian trade on Thursday as weak U.S. economic readings and middling comments from the Federal Reserve saw traders pricing in a diminished chance of more interest rate hikes, denting the dollar.
Crude prices were reeling from a 10% drop in October, as investors saw a much lower risk premium from the Israel-Hamas war. Recent reports also indicated some deescalation in the conflict, as over 300 foreign nationals and injured people were allowed to leave Gaza.
Prices were also pressured by fears of worsening demand in the coming months, following dismal business activity readings from the euro zone, China and most recently, the U.S. Strength in the dollar had also pressured oil markets, as traders positioned for a potentially hawkish Fed.
But a drop in the dollar- which traded 0.4% lower against a basket of currencies on Thursday- offered some relief to oil markets.
Brent oil futures rose 0.6% to $85.13 a barrel, while West Texas Intermediate crude futures rose 0.8% to $81.04 a barrel by 21:03 ET (01:03 GMT).
The Fed was the main point of focus this week, with the central bank keeping rates on hold, as expected. But while it still left the door open for more policy tightening, comments from Fed Chair Jerome Powell presented a more mixed outlook for higher rates.
Powell said in a post-meeting briefing that the Fed still had a long way to go before inflation reached its 2% target. But he also noted that financial conditions had tightened substantially this year, and cited more risks to the economy.
His comments saw the dollar sink in overnight trade, while Fed fund futures prices also showed that traders were pricing in a smaller chance of an interest rate hike in
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