This article was published on December 19, 2024.

Oil prices retreat from the previous trading session after the Federal Reserve signaled fewer interest-rate cuts next year, fueling demand concerns. Brent crude and WTI are both down 0.1% at $73.35 and $69.95 a barrel, respectively. Futures gained 1% on Wednesday after the latest U.S. inventory data showed crude oil stocks fell on higher exports, indicating an uptick in global demand. But the U.S. central bank’s cautious outlook, coupled with widespread concerns about weaker global demand and an anticipated supply surplus, weighed on market sentiment. “The Fed’s hawkish shift dampened an early rebound in oil prices yesterday,” Swissquote Bank’s senior analyst Ipek Ozkardeskaya says. “The barrel of U.S. crude slipped back to $70 per barrel… We anticipate rangebound trading within the $67-$70 per barrel range.” (giulia.petroni@wsj.com)

Oil Drops After Fed Signals Fewer Rate Cuts Next Year

0133 GMT — Oil drops in early Asian trade amid weak sentiment. The Federal Reserve signaled that it will slow down rate cuts in 2025 after making an expected 25-basis-point cut in December. “The more hawkish tone from the FOMC meeting seems to trigger some sell-the-news across Wall Street,” IG market strategist Yeap Jun Rong says in a note. The Fed’s remarks sent the dollar higher, which makes oil more expensive for international buyers. Crude oil will likely see some volatility amid uncertainty surrounding U.S. political developments and new European sanctions targeting Russian oil exports, says Joseph Dahrieh, managing principal at Tickmill. Front-month WTI is down 0.6% at $70.22/bbl while Brent is 0.5% lower at $73.01/bbl. (sherry.qin@wsj.com)

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