• 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
  • 5 days They pay YOU to TAKE Natural Gas
  • 2 days How Far Have We Really Gotten With Alternative Energy
  • 2 days What fool thought this was a good idea...
  • 5 days Why does this keep coming up? (The Renewable Energy Land Rush Could Threaten Food Security)
  • 10 hours A question...
  • 11 days The United States produced more crude oil than any nation, at any time.

Traders Predict 25-Point Rate Hike After OPEC+ Surprise Oil Output Cut

A 25-basis point interest rate hike by the Federal Reserve in May is now more likely to materialize as a result of the surprise oil production cut announced on Sunday by OPEC+, futures traders predict. 

Chances now are higher for a May interest rate hike on the same level as the most recent hike, which was one-quarter of a percentage point, MarketWatch cited Fed funds futures traders as saying.

Fed funds futures traders now pinpoint a more than 58% chance of the May rate hike, up from 48% last Friday. 

On Sunday, OPEC+ shocked oil markets by announcing that output would be reduced further, by around 1.66 million barrels per day, resulting in a massive 8% rally in crude oil prices late in the day. The new cuts, in combination with existing reductions, represent 3.7% of total global oil demand. At the same time, Russia said it would extend production cuts of 500,000 bpd until the end of this year. 

On March 22, oil prices rose 2% after the Federal Reserve raised the key short-term interest rate by 25 basis points, with the smaller rate hike intended to reflect what the Fed called a “sound and resilient” U.S. banking system, after rapid rises in interest rates ultimately led to the collapse of Silicon Valley Bank (SVB). 

At 11:14 a.m. EST, Brent crude was trading up 5.66% at $84.41, for a $4.52 gain on the day. West Texas Intermediate (WTI) was trading up 5.79%, breaking the $80 level at $80.05, for a $4.38 gain on the day. 

By Charles Kennedy for Oilprice.com

More Top Reads From Oilprice.com:

Join the discussion | Back to homepage

Leave a comment
  • George Doolittle on April 03 2023 said:
    Stunning collapse in all of US real estate but no currency collapse absolutely.

    Natural gas prices upon the USA remain effectively free as well which hard to get better news than that for solving literally any and all logistical issues that might arise. Definitely not interest in Gazprom in the least at the moment. Kazakhstan interesting story today as a Battle for the Caspian Sea might suddenly erupt out that way. Volgograd might be invaded from their East this go around in point of fact.

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