Crude Oil Pushing Towards $60

Crudeoilhas posted gains in the North American session. Currently, crude is trading at $59.66, up $0.84 or 1.43%. Brent crude oil futures are trading at $64.70, up $0.86 or 1.34%. The catalyst for the jump in crude prices was a comment from U.S. President Trump that China and the U.S. were close to reaching a trade deal.

Crude Recovers after Inventory Surplus

Oil prices showed some movement on Wednesday, after theEnergy Information Administration (EIA) surprised the markets with a surplus. Granted, the gain was only 0.8 million barrels, but analysts had predicted a significant decline of 2.9 million. There is a large oversupply of crude on global markets, which is putting downward pressure on crude. Since mid-September, the EIA report has shown surpluses in ten of the past twelve releases.

Fed Sends Markets Dovish Message

There were no surprises as the Federal Reserve maintained theFederal funds rateat a range between 1.50% and 1.75%. However, FOMC members were more dovish than the markets had anticipated, which put pressure on the U.S. dollar.

Fed Chair Jerome Powell said that the U.S. economy was performing well, despite difficulties in global economic conditions. Still, it was apparent that the Fed was in a dovish mood, as thedot plot of FOMC members future projections showed a pronounced downward shift compared to the previous meeting in September. Thirteen of the seventeen FOMC members projected no change in current rate levels until 2021. Back in September, eight members projected no changes in rates, while nine members expected one or more increases in 2020.FOMC members maintained the GDP forecast of 2.2% for 2019, but lowered its inflation forecast for 2019 to 1.6%, compared to 1.8% in September.

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