Crude Oil Soars Past Bitcoin and Gold Ahead of Fed Decision

Crude oil prices have surged ahead of Wednesday's Federal Reserve rate decision, outperforming Bitcoin and gold. The Brent crude price rose by 2.75% to $107.48, while West Texas Intermediate gained 2.51% to $102.56. In contrast, the total market capitalization of cryptocurrencies fell 4.32% to $2.62 trillion in 24 hours.

The supply shock that lifted crude oil prices comes from a damaged pipeline in Saudi Arabia, which threatens up to 4% of global oil supply. The outage has been compounded by fresh Houthi strikes on Saudi soil and an attack on a vessel in the Strait of Hormuz. As a result, crude gained 8% on the week, clearing $100 for the first time since July.

Market analysts predict that unless talks in Oman produce something operational, crude oil prices may continue to rise towards $119.48, the high set in early March. Meanwhile, traders now price in an 86.3% chance of a Fed rate hike to 375-400 basis points, up from 59.4% last week and 33.9% a month ago.