Oil rates decline amid signs of reduced demand in US
Date
2/25/2024 2:41:56 AM
(MENAFN) On Friday, oil rates experienced a decline, driven by indications of reduced demand in the United States, the world's largest oil consumer. However, the drop in prices was tempered by concerns over potential escalations in attacks within the Red Sea region.
At 10:50 a.m. local time (0750 GMT), the international benchmark crude, Brent, traded at USD83.24 per barrel, marking a decrease of 0.51 percent from its previous closing price of USD83.67 per barrel recorded in the preceding trading session on Thursday. Similarly, the American benchmark, West Texas Intermediate (WTI), stood at USD78.13 per barrel at the same time, reflecting a decline of 0.61 percent from Thursday's closing figure of USD78.61 per barrel.
The Energy Information Administration's report revealed a rise in US commercial crude oil inventories, reaching approximately 3.5 million barrels, thus elevating total reserves to 443 million barrels by the week ending February 16. This increase in stockpiles signals a decrease in demand, thereby exerting downward pressure on prices. Furthermore, strategic petroleum reserves, which are not factored into commercial crude stocks, observed a rise of 700,000 barrels.
Adding to market concerns was the anticipation that the imposition of high interest rates in the United States might further dampen oil demand, thereby contributing to the downward trajectory of prices. The uncertainty surrounding the timing of potential interest rate adjustments by the US Federal Reserve (Fed) remains a focal point for analysts and investors alike. Monitoring the statements and speeches of Fed officials for insights into future policy decisions has become paramount.
On Thursday, Fed Vice Chairman Philip Jefferson acknowledged the possibility of commencing a late-year reduction in the policy rate, contingent upon economic growth. However, he refrained from providing a specific timeline due to unforeseen risks that could influence the central bank's deliberations, underscoring the cautious approach adopted by monetary authorities.
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