Oil prices dipped Thursday after the greatest monthly decline in the previous session as U.S. interest rate hike forecasts countered crude storage drawdowns.
By 0809 GMT, Brent November futures fell 97 cents, or 1.04%, to $92.56 a barrel. WTI slid 97 cents, or 1.08%, to $88.69, its lowest level since Sept. 14. Thursday’s trading saw both benchmarks tumble over $1.
As anticipated, the Fed held rates steady during yesterday’s FOMC meeting. ING analysts wrote in a client note that the hawkish pause put pressure on risk assets like oil.
After its Federal Open Market Committee (FOMC) meeting, the U.S. Federal Reserve maintained interest rates but raised them by year-end, which might slow economic growth and fuel demand.
Federal Reserve policymakers expect the benchmark overnight rate range to peak at 5.50% to 5.75% this year, a quarter percentage point higher than now.
That position also drove the U.S. currency to its highest level since early March, making oil more expensive for foreign purchasers.
After the U.S. Energy Information Administration (EIA) reported on Wednesday that crude inventories fell in line with expectations last week, energy markets did not react. Some analysts said the decline was smaller than expected, 2.14 million barrels versus 5.25 million barrels.
“After the 10% gain since the start of the month, the disappointing inventory drawdown encouraged traders to lock in profits,” ANZ analysts wrote.
According to the EIA’s weekly report, high oil exports drove the stock draw, while refiners began autumn maintenance, lowering gasoline and diesel stockpiles.
With crude stockpiles at Cushing, the WTI delivery hub, at their lowest since July 2022 and production cuts by the Organization of the Petroleum Exporting Countries and allies continuing, price losses were capped by worldwide tight supply entering the fourth quarter.
