Oil jumps after Fed cuts U.S. interest rates, then pares gains - Reuters

Oil jumps after Fed cuts U.S. interest rates, then pares gains - Reuters:

Oil prices rose on Tuesday but remained below session highs reached after the U.S. Federal Reserve cut interest rates in an emergency move designed to shield the world’s largest economy from the impact of the coronavirus.

The central bank’s statement said it was cutting rates by a half percentage point to a target range of 1.00% to 1.25%. Crude futures spiked, then pared gains as traders viewed the Fed’s move as a signal that the situation was more serious than many had thought, said Bob Yawger, director of energy futures at Mizuho in New York.

“I think the rate cut was expected to happen this week and while it adds liquidity to the market, it does little to encourage anyone to book a flight anywhere,” said Scott Shelton, an energy broker with ICAP in Durham, North Carolina. “I think the market effects are short lived when it comes to the price of oil.”

Brent crude LCOc1 was up $1.50 a barrel, or 2.7%, at $53.40 by 10:45 a.m. EST (15:45), off the session high of $53.90 a barrel hit immediately after the rate cut. U.S. West Texas Intermediate (WTI) CLc1 was up $1.49 a barrel, or 3.1%, at $48.23 a barrel, after trading as high as $48.66.