Shafaq News/ Oil prices fell inAsian trade on Thursday after the U.S. Federal Reserve signaled it would slowthe pace of interest rate cuts in 2025, which could slow economic growth andreduce fuel demand.
Brent futures fell 47 cents, or0.6%, to $72.92 a barrel by 0515 GMT. U.S. West Texas Intermediate crude fell39 cents, or 0.6%, to $70.19.
The declines reversed most of thebenchmark contracts' gains from Wednesday, when prices settled higher as U.S.crude stocks fell and the U.S. Federal Reserve cut interest rates by 25 basispoints as expected.
Prices weakened after U.S. centralbankers issued projections calling for two quarter-point interest rate cuts in2025 on concerns about rising inflation. That was half a point less than theyhad anticipated as of September.
Lower rates decrease borrowingcosts, which can boost economic growth and demand for oil.
"The demand-supply balancegoing into 2025 continues to look unfavourable and predictions of more than 1.0million bpd demand growth in 2025 look stretched in our opinion. Even if OPEC+continues to withhold production, the market may still be in surplus," DBSBank's energy sector team lead Suvro Sarkar said.
Meanwhile, although demand in thefirst half of December rose year-on-year, volumes remained lower than expectedby some analysts.
JP Morgan analysts said in a notethat global oil demand growth for December so far was 700,000 barrels per dayless than it had expected, and for the year-to-date, global demand had risen by200,000 bpd less than it had forecast in November 2023.
Official data from the EnergyInformation Administration on Wednesday showed U.S. crude stocks fell by934,000 barrels in the week to Dec. 13, compared with analysts' expectations ina Reuters poll for a 1.6 million-barrel draw.
While the drawdown was less thanexpected, the market found support in the data as U.S. crude exports rose by1.8 million bpd last week to 4.89 million bpd.
(REUTERS)