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(Seoul=Yonhap Infomax) Sung Jin Kim—New York oil prices climbed for the first time in four trading days, buoyed by renewed risk appetite as expectations grew that the US Federal Reserve (Fed) will cut rates again next month.
On November 24 (Eastern Time), West Texas Intermediate (WTI) crude for January delivery settled at $58.84 per barrel on the New York Mercantile Exchange, up $0.78, or 1.34%, from the previous session. This marks WTI’s first gain since November 18.
WTI briefly slipped more than 1% earlier in the session but reversed course as risk-on sentiment returned, with US equities rallying across the board. The previous session’s close was WTI’s lowest since October 21.
Christopher Waller, a Fed Governor and a key contender for the next Fed Chair, told Fox Business in an interview that his main concern regarding the Fed’s dual mandate (price stability and full employment) is the labor market. “I support a rate cut at the next meeting,” Waller said, adding that the labor market remains weak and there is no evidence of a rebound. However, he cautioned that the January meeting could be challenging due to a “flood of data.”
Earlier, on November 21, John Williams, President of the Federal Reserve Bank of New York and widely regarded as the Fed’s third most influential official, also voiced support for additional rate cuts. Futures markets are now pricing in a more than 70% probability of a rate cut next month.
Some analysts urged caution, noting the need to monitor US-led efforts to broker an end to the Russia-Ukraine war. Energy consultancy Ritterbusch & Associates said in a report that recent oil price weakness is mainly linked to progress in Ukraine peace talks, but argued that the more than 5% drop in the risk premium is excessive. The report noted that a prolonged conflict could see geopolitical risk priced back into crude futures.
sjkim@yna.co.kr
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