Oil Stable At $ 50 After Christmas Accident

Crude oil prices rose on Boxing Day after a broad decline that made West Texas Intermediate crawl near US $ 40 and Brent briefly fell below US $ 50 per barrel. Today at 09:35 ET, the international benchmark has recovered slightly, rising 1.34 percent to US $ 51.45 per barrel, after slumping as much as 6.2 percent in the previous trading session to close at US $ 50.47 per barrel, according to reports Reuters.

Meanwhile, WTI recovered some of its losses over the past few days, trading rose 2.61 percent at US $ 43.64 per barrel at the time of writing, after losing 6.7 percent and closing at US $ 42.53 per barrel on last session.

The decision of the US Federal Reserve to raise interest rates once again before the end of 2018 certainly affects WTI prices because it increases the cost of cross-industry loans. However, there is broader concern among market players in oil and that concerns the global economy. With most authorities expecting a slowdown in growth next year, concerns about how crude oil demand will rise in 2019 can only be expected.

Stock market volatility also depressed oil prices. Bloomberg quoted Rakuten Securities analyst as saying, "There are some bearish factors in the oil market, and the situation will not improve in the near future. The bear market is currently likely to continue for some time." Satoru Yoshida added that "oil prices could rise if OPEC + made announcements about specific steps. "These steps may have to include deeper cuts given the 1.2 million barrels per day announced by OPEC + earlier this month failed to impress the market in chaos. Related: Lessons from the Oil Market in 2018

A CMC market analyst approved by Reuters to speak. "$ 50 is a level of psychological support (for Brent)," said Margaret Yang. "But market confidence needs to be restored for oil prices … which includes a rebound in equity markets and / or a greater reduction in production from major oil exporters."

Even deeper cuts may be enough: the US-China trade war continues to worry traders as well as partial closure of the government in Washington that could last a little longer than usual: President Trump said it might have to continue until Congress agreed to his request for the border wall with Mexico.

By Irina Slav for Oilprice.com

Read more from Oilprice.com: