None The US fed has lowered the price of oil in the US
How?
The fed didn't increase the supply of oil
By lowering the price it may have increased demand - I say May because the price doesn't seem to much impact on consumption. (It impacts how you feel when you filling up)
Some claim the fed may cause a recession in the future, which may reduce consumption. If true then the future price of oil should be cheaper - ie 6-12 month futures should of declined
Instead all futures prices declined - with the current month taking the biggest hit.
That's the opposite of logical. No change in unemployment today but the price of oil declined 5 ish percent
That 5% decline ought to mean lower gas and diesel prices
Seens more like a knee jerk negative cascade than a logical change from increased supply and/or reduced demand
Oil prices fall which causes another knee jerk fall in oil based ETFs
ETFs sell off which causes the share price of the companies held in those ETFs to fall
Most of those companies are hedged against the fall in WTI prices. Most of the loss from the drop in oil prices is being taken by the financial firms on the other side of those hedges - and their share prices didn't suffer nearly as much
Interesting watching it all happen
A bunch of people panicking because they apparently think lower prices means less consumption - which will lead to even lower prices. That's Alice in Wonderland logic
Of course that's not why they sold the prices lower. They did so because the person beside them was doing so, and they didn't want to get left behind
Once they think about what they just did, I suspect they'll undo it
If they don't, I suspect OPEC will step up and make an actual reduction to supply
If the US fed can lower oil prices without changing supply or demand, one wonders what OPEC can do to the oil price by actually reducing supply?
ps last Wednesdays EIA report showed an increase in US oil and fuel inventories of 9 million barrels
But that was after taking 7 million barrels from the SPR and importing another 8 million - total of 15 million extra barrels into the US and only 9 million left at the end of the week
That looks like a 6 million barrel draw down to me. Not a sign of reduced consumption
On the positive news side - Alberta natural gas prices seem to be back up