Oil prices drifted lower on Thursday amid ongoing uncertainties over the timing of the US Federal Reserve’s (Fed) interest rate cut, which fueled demand concerns in the world’s largest oil-consuming country.
International benchmark Brent crude traded at $83.24 per barrel at 10.17 a.m. local time (0714 GMT), a decrease of 0.22% from the closing price of $83.43 per barrel in the previous trading session.
The American benchmark West Texas Intermediate (WTI) traded at $79.06 per barrel at the same time, a 0.96% fall from the previous session that closed at $79.83 per barrel.
Oil prices fell on Thursday, influenced by data from the Federal Reserve’s Beige Book, which compiles data on current economic conditions from the central bank’s 12 districts nationwide. The data indicated that the overall economic outlook has somewhat deteriorated.
Analysts predict that the US GDP, which is expected to be released on Thursday, will reveal the Fed’s next moves.
However, experts fear that the Fed will cut its policy rate later than expected to put downward pressure on oil prices, as high interest rates boost the value of the US dollar, making oil more expensive for holders of other currencies.
The US dollar index, which measures the US dollar’s value against other currencies, rose 0.01% to 105.12 at 9.56 a.m. local time (0656 GMT) from the previous closing session of 105.10.
Conversely, data released by the American Petroleum Institute (API) late on Tuesday showed a decrease of 6.49 million barrels in US crude oil reserves, against the market expectation of a draw of 1.90 million barrels.
The large drop in commercial crude inventories signals strengthening national demand to limit further price decreases.
The US Energy Information Administration (EIA) will release official inventory data later in the day.
Meanwhile, market players are waiting for the meeting of the OPEC+ group, the Organization of the Petroleum Exporting Countries (OPEC), and allies on June 2 to see if the group will continue with its output curtailment policy.
