Crude surges on US market rally, rate cut hopes
29 October 2008 08:41 [Source: ICIS news]
SINGAPORE (ICIS news)--Crude futures jumped nearly $4/bbl on Wednesday following a sharp rally in the US stock market overnight amid expectations that the US Federal Reserve would cut interest rates.
At 07:47 GMT, December NYMEX light sweet crude futures were trading at $64.85bbl, up $2.12/bbl on Tuesday’s settlement level, after hitting a high of $66.71/bbl.
December Brent on
The US Dow Jones industrial average soared by more than 10% on Tuesday, marking its second largest gain on record, due to a late session buying spree. Asian markets also rebounded on Wednesday with
The US and Japan were expected to cut interest rates this week in order to support their economies which have been hard hit by the global economic crisis.
Analysts expect that the US Federal Reserve will cut US interest rates by at least half a point to 1% at its meeting later on Wednesday. The Bank of Japan is also expected to consider a rate cut at its policy meeting on Friday.
Data continued to reveal a decline in demand for oil products with
Weekly US inventory data due out today Wednesday is expected to reveal a fifth consecutive weekly gain in crude stocks of more than 1m bbls/day. Stocks of distillates and gasoline were expected to also show substantial rises.
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By: James Dennis
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