Fed holds interest rate, oil prices weaken

Jakarta,- Crude oil prices moved against the grain into the red zone after rallying to October 2023 levels. The weakening of oil prices is in line with the statement of the United States central bank, the Fed, to maintain the benchmark interest rate at 5.25%-5.5%.

Based on Bloomberg data, Thursday (1/2/2024) at 02.38 WIB early morning, the price of West Texas Intermediate (WTI) oil for the March 2024 contract weakened -0.2.62% to US$75.78 per barrel. Brent oil prices, as a global benchmark, in the March 2024 contract also weakened -1.39% to US$81.72 per barrel.

In addition to the Fed's policy of maintaining high interest rates, the market is also waiting for the United States (US) response to the attack that killed its soldiers.

"All attention is on Biden's next move and that will likely determine the direction of the market," explained senior commodity analyst at Seoul-based SI Securities Corp, Will Sungchil Yun.

President Joe Biden said that he had made a decision in response without elaborating. Biden added that Iran was responsible for providing the weapons used in the attack.

 Meanwhile, Tehran has denied involvement in the 'deadly' attack, and vowed to retaliate against any attack from Uncle Sam on its territory or assets abroad.    

US lawmakers have also pressured Biden to retaliate against the attack, the first hostile strike since the Israel-Hamas war in October 2023. 

There is also a challenge for the president in showing resilience without triggering an oil price spike in an election year.

With increased attacks in the Red Sea, crude oil commodity prices in January 2024 have been higher. However, strong supply and demand concerns from China still limit the upside. 

Investors will also be watching Energy Information Administration (EIA) data on Wednesday evening local time (31/1) for a weekly snapshot of Uncle Sam's crude oil production and stocks. Industry data also showed shrinking inventories.

Sources : market.bisnis.com- Feb 01.24

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Crude Oil Prices Weaken Further