• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 2 days Does Toyota Know Something That We Don’t?
  • 5 days OPINION: Putin’s Genocidal Myth A scholarly treatise on the thousands of years of Ukrainian history. RCW
  • 2 days World could get rid of Putin and Russia but nobody is bold enough
  • 18 hours America should go after China but it should be done in a wise way.
  • 5 days CHINA Economy IMPLODING - Fastest Price Fall in 14 Years & Stock Market Crashes to 5 Year Low
  • 4 days China is using Chinese Names of Cities on their Border with Russia.
  • 5 days Russian Officials Voice Concerns About Chinese-Funded Rail Line
  • 4 days CHINA Economy Disaster - Employee Shortages, Retirement Age, Birth Rate & Ageing Population
  • 5 days Putin and Xi Bet on the Global South
  • 5 days "(Another) Putin Critic 'Falls' Out Of Window, Dies"
  • 6 days United States LNG Exports Reach Third Place
  • 6 days Biden's $2 trillion Plan for Insfrastructure and Jobs
  • 9 days huge-deposit-of-natural-hydrogen-gas-detected-deep-in-albanian-mine
Traders Cautiously Optimistic About Crude

Traders Cautiously Optimistic About Crude

In the forthcoming week, traders…

Oil Prices Set to Rise as Global Stock Refills Ramp Up

Oil Prices Set to Rise as Global Stock Refills Ramp Up

China's increased oil inventory building,…

Julianne Geiger

Julianne Geiger

Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.

More Info

Premium Content

Fed Taper Delay Could Directly Benefit Oil Prices

After breaking the WTI $70 resistance level Thursday with 2.8% gains for both key benchmarks, prices have since slid, but with a weaker-than-expected jobs report, the Fed is now likely to delay tapering, giving more impetus to oil prices in the short term. 

WTI was trading at $69.81 at 10:57a.m. EST, while Brent was at $72.95. 

By August 18th, oil had posted its longest losing streak in 18 months after the fed report. 

Now, the new jobs data will give the Fed an excuse to push off the taper, possibly until October, so oil prices should respond positively, cutting the long-running losing streak.

Softening demand and worker shortages as a result of COVID-19 lent to slowed August job growth, with data coming in weaker than expected, but still showing a sustained economic expansion. Nonfarm payrolls were up 235,000 in August, far below their over 1 million surge in July. Many analysts found this disappointing. 

But there are plenty of cross-currents in the August jobs report, and oil prices should benefit. 

“The bad news is that it missed by two thirds basically of expectations and the good news is that it gives the Fed cover to push off tapering. It just means more Fed for longer,” Thomas Hayes of Great Hill Capital in New York, told Reuters on Friday.  

"My guess is the announcement will be in November instead of September and the implementation will probably be late this year or more likely early next year. Beginning taper in October is now off the table."

Oil prices have a history of responding negatively to Fed tapering. Most notably, in the summer and fall of 2014, oil investors fled the market when the Fed was tapering bond purchases. That massive sell-off further accelerated the oil price slide. 

By Julianne Geiger for Oilprice.com


More Top Reads From Oilprice.com:

Download The Free Oilprice App Today

Back to homepage

Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News