Fed and its rate hike agenda sets positive tone in oil: Angel Commodities Broking

Views by Mr. Prathamesh Mallya (Chief Analyst - Non-Agri Commodities & Currencies, Angel Commodities Broking):

"US FED in its latest monetary policy decided to increase interest rates by 0.25% to 1.75% and hinted at at least two more rates for 2018. Chairman Jerome Powell was confident about the growth in the economy and highlighted that the latest tax cuts and government spending will only strengthen the economy further. The Fed chairman also raised the long term "neutral" rate, the level at which the monetary policy neither boosts nor slows down the economy. The policy makers also hinted that interest rates might rise by three times next year and two times in 2020 further indicating their strength in the economy.

Crude oil prices have risen by 5 percent in this week with Brent touching $70 mark and WTI crude touching $65 mark. This reaction in oil prices is on account of surprise crude inventory withdrawal in the US and US presidents threat to withdraw from the accord of Tehran and Six world powers with regards to nuclear sanctions. Hedge funds also continue to drive their bullish bets in turn supporting oil prices. From here on $67 seems to be there on cards while MCX oil prices can move towards Rs.4300 per barrel in next fortnight."

Source : Equity Bulls

Keywords