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WTI snaps the three-day losing streak, holds above $81.00 after Fed rate pause

November 2, 2023| Forex Market


  • WTI prices hold positive ground above the $81.00 mark post Federal Open Market Committee (FOMC) meeting.
  • The FOMC maintained the interest rate unchanged at the 5.25–5.50% range on Wednesday.
  • The rising Middle East tensions could lead to supply disruptions.

Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around $81.00 so far on Thursday. WTI prices snaps the three-day losing streak after the Federal Open Market Committee (FOMC) meeting decided to pause the rate on Wednesday. However, the weaker Chinese data might dampen the oil demand outlook.

As widely expected, the FOMC maintained the interest rate unchanged on Wednesday. During the press conference, Fed Chair Jerome Powell emphasized the committee’s dependence on data and vowed to move cautiously. FOMC opens the door for another rate hike, but the market believes that the hiking cycle is already over, which drags the US Dollar (USD) lower across the board.

Furthermore, the escalating tension in the Middle East might exacerbate the already-existing energy market disruptions caused by Russia’s war in Ukraine.

On the other hand, the Chinese manufacturing PMI fell below 50 in October due to slower production and weaker demand. That being said, the downbeat Chinese data adds doubt to recent optimism for a recovery in the world’s second-largest economy. It’s worth noting that China is the major oil consumer in the world, and a negative economic outlook could exert pressure on oil prices.

Looking ahead, oil traders will monitor the US weekly Initial Jobless Claims on Thursday. On Friday, the attention will shift to the US Nonfarm Payrolls, which is expected to add 180K jobs in October from 336K in September. These events could significantly impact the USD-denominated WTI price. Oil traders will take cues from the data and find trading opportunities around WTI prices.


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