Oil Falls In Volatile Trade After Fed Leaves Rate Unchanged

Reuters

NEW YORK, Sept 17 (Reuters) - Global oil futures fell Thursday, resuming their slide after a brief spike following the Federal Reserve's announcement that it would leave U.S. interest rates unchanged.

Economists saw about a one-in-four chance of a rate increase. The dollar eased ahead of the announcement. A weaker U.S. currency can be supportive to dollar-denominated commodities like oil.

Both U.S. crude and Brent extended losses ahead of the 2 p.m. EDT (1800 GMT) announcement. After the decision was announced, U.S. crude darted into positive territory while Brent pared losses. Within 10 minutes, both benchmarks relinquished gains.

The CBOE oil volatility index fell ahead of the announcement but jumped nearly 15 percent in the minute after the decision. It traded more than 9 percent lower in the day by crude oil settlement.

Many in the market shrugged off the Fed's decision, saying traders will focus instead on other macro factors.

"The oil market will go back to watching to see if the economic slowdown in China spreads to other economies and whether low oil prices start to lower U.S. oil production significantly," said Gene McGillian, senior analyst at Tradition Energy in Stamford, Connecticut.

Analysts suggested a weaker dollar would provide some support to crude oil prices, which were pressured early on Thursday after weak Japanese data revived fears over the prospects for global growth.


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Brent Crude Oil : $53.96/BBL 0.35%
Light Crude Oil : $51.36/BBL 0.21%
Natural Gas : $3.209/MMBtu 0.34%
Updated in last 24 hours