Oil prices edged lower on Thursday after the US Federal Reserve (Fed) decided to keep interest rates unchanged and data from the US Energy Information Administration (EIA) reported an increase in US crude stocks.
The international benchmark Brent crude decreased by 0.4%, trading at $75.46 per barrel at 10.39 a.m. local time (0739GMT), down from $75.78 at the close of the previous session.
The US benchmark West Texas Intermediate (WTI) fell by 0.4%, reaching $72.35 per barrel, compared to its prior session close of $72.62.
Oil prices continued its downward movement over the Fed decision to keep the interest rate unchanged at the meeting held on Wednesday, while Fed Chair Jerome Powell’s statements about there was no need to rush to adjust the policy stance further contributed to price falls.
Fed, previously announced that they will act data-centered on interest rate cuts, paused the interest rate cut after continuing the easing cycle in the last 3 meetings. Meanwhile, the growth data to be announced on Thursday in the US is expected to give a message about the Bank’s future projections.
Fed kept its policy rate unchanged at 4.25-4.5%, in line with expectations. In the policy decision text, it was stated that inflation remains somewhat elevated.
Asked at the press conference about US President Donald Trump’s remarks, Fed Chair Jerome Powell said: “I demand interest rates drop immediately.”
“I am not going to have any response or comment whatsoever on what the president said. It is not appropriate for me to do so,” Powell added.
While the Fed’s decision to leave interest rates unchanged at its first monetary policy meeting of the year was expected by market players, the decision signaled a slowdown in economic activity in the world’s largest oil-consuming country and pushed prices down.
In addition, data from the US Energy Information Administration (EIA) indicating that oil stocks in the US increased also pressured prices.
According to the EIA’s weekly oil report, US commercial crude oil stocks rose to 415.1 million barrels last week, an increase of about 3.5 million barrels compared to the previous week.
Expectations were that stocks would increase by about 2.86 million barrels. The rise, above market expectations, signaled a decrease in demand in the country and pulled oil prices down.
By Duygu Alhan
