Oil prices fall in Asian markets amid uncertainty over U.S. interest rates, inventory levels
Date
2/28/2024 4:36:34 AM
(MENAFN) In the Asian market scene, oil prices experienced a decline on Wednesday, influenced by several factors including speculation surrounding the delay in potential US interest rate cuts and an uptick in US crude inventories. Despite earlier optimism stemming from reports suggesting a potential extension of production cuts by OPEC+ members, these positive sentiments were overshadowed by prevailing market concerns.
Brent crude futures observed a decrease of 30 cents, equivalent to 0.36 percent, settling at USD83.35 per barrel by 0302 GMT, while US West Texas Intermediate crude futures also saw a decline of 28 cents, reaching USD78.59 per barrel. This downward trend reflected the prevailing uncertainty and cautious sentiment among investors.
Adding to the market unease, Michelle Bowman, a member of the US Federal Reserve, indicated on Tuesday that she does not perceive an immediate need to lower US interest rates. Bowman cited concerns over potential inflationary pressures that could impede efforts to manage price stability or even trigger a resurgence in inflationary trends. Her remarks underscored the complexity of economic factors influencing central bank decisions and contributed to the cautious outlook among oil market participants.
Despite these challenges, there were indications from within OPEC+ circles of a potential extension of voluntary oil production cuts into the second quarter of 2024. Sources within the alliance revealed to Reuters that discussions were underway regarding the possibility of prolonging these cuts to provide continued support to the oil market. Some sources even suggested the prospect of extending cuts until the end of the year, underscoring the ongoing efforts of OPEC+ members, led by Russia, to manage oil supply dynamics and stabilize prices.
This development follows the previous agreement in November, wherein OPEC+ members committed to voluntary production cuts totaling approximately 2.2 million barrels per day for the first quarter of the current year. Notably, this agreement included Saudi Arabia's decision to extend its voluntary reduction in production, reflecting the collective efforts of major oil-producing nations to address market imbalances and maintain stability amidst evolving global economic conditions.
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