Oil slips on US growth worries, ample crude supply

Oil Prices Fall as Fed Delays Interest Rate Cut

Investors Digest Impact of Fed Decision

Oil prices dropped in early trade on Thursday as investors reacted to the US Federal Reserve‘s decision to likely delay a possible interest rate cut to December.

Brent and WTI Crude Futures Decline

Brent crude futures fell by 23 cents (0.3%) to $82.37 a barrel, while US West Texas Intermediate (WTI) crude futures decreased by 20 cents (0.3%) to $78.30. Both benchmarks had gained approximately 0.8% in the previous session.

Fed Holds Rates Steady

The Fed held rates steady on Wednesday, pushing out the start of policy easing to perhaps as late as December. Higher borrowing costs tend to dampen economic growth, which can limit oil demand.

Fed Chair Comments

Fed Chair Jerome Powell stated that inflation had fallen without significantly impacting the economy, suggesting that this trend may continue.

US Crude Stockpiles Rise

US crude stockpiles increased more than expected last week, driven by a surge in imports, while fuel inventories also rose more than anticipated, according to data from the Energy Information Administration.

Bearish Report from IEA

The International Energy Agency issued a bearish report warning of excess supply in the near future, contrasting with OPEC+’s bullish report earlier in the week.

Ceasefire Talks in Gaza

Traders are monitoring ongoing talks for a ceasefire in Gaza, which could reduce fears of potential supply disruptions from the oil-producing region if resolved.

Houthi Attacks on Shipping

Houthis claimed responsibility for attacks on a Greek-owned coal carrier near Yemen’s Red Sea port of Hodeidah, highlighting ongoing risks to shipping in the region.

Also Read: Govt allocates Rs27,000mn for Health Sector