Oil Prices Decline after U.S Fed Rates Decision
With expectation of a lower demand, the prices of crude oil fell on Friday in the global commodity market as a stronger dollar and the US Federal Reserve’s (Fed) rate decision raised fresh concerns on U.S. economic trajectory.
Brent crude, fell by around 0.1% trading at $71.76 per barrel, down from $71.83 at the previous session’s close. The US benchmark, West Texas Intermediate (WTI) declined by 0.1%, settling at $68.26 per barrel, compared to its prior session close of $68.33.
Global market concerns over potential new actions by US President Donald Trump in the ongoing trade war, particularly the imposition of tariffs, continue to fuel uncertainty about oil demand.
Amid these concerns, crude prices came under pressure from a stronger dollar, which edged higher after the Fed indicated on Wednesday that it wasn’t in a rush to cut interest rates further this year.
The US dollar index opened the day with a 0.2% increase at 104. The Fed held its benchmark interest rate steady at 4.25% to 4.50%, as expected, and raised its inflation and unemployment projections for 2025, while lowering its economic growth forecast.
Chairman Jerome Powell noted that tariffs are a concern, especially among consumers, and may strain the economy. Trump on Thursday urged the Fed to begin cutting rates after the central bank’s decision to hold them steady.
However, new US sanctions on Iran and OPEC+’s plan to cut production limited further price declines by fuelling concerns about tighter supply.
The US Treasury Department imposed sanctions on 19 entities and vessels tied to Iran’s oil exports, while the US State Department sanctioned a Chinese oil terminal for buying and storing Iranian crude from a sanctioned vessel.
Daniel Hynes, a senior commodity strategist at the Australia and New Zealand Banking Group, forecasted a 1 million barrels per day decline in Iran’s oil exports due to tighter restrictions.
He also noted that while rising OPEC+ output could offset this, new cutback plans by OPEC+ members could keep production steady in the coming months. #Oil Prices Decline after U.S Fed Rates Decision Dangote Refinery Stops Selling Petrol in Naira
