Oil prices rose on Wednesday after US crude inventories fell and the Federal Reserve cut interest rates as expected. However, gains were capped as the Fed signaled it would slow the pace of cuts.
Brent futures settled up 20 cents to $73.39 a barrel, while US West Texas Intermediate crude rose 50 cents to $70.58. The US Energy Information Administration reported that US crude stocks and distillate inventories fell, but gasoline inventories increased.
The Fed’s interest rate cut was seen as a positive sign for the oil market, with demand expected to improve due to reduced unemployment and stable inflation rates. However, the dollar index surged to a year-to-date high after the announcement, making oil more expensive in other countries.
Oil investors had already priced in the interest rate cut, which will lead to lower borrowing costs and boosted economic growth, increasing demand for oil. The Fed is expected to make just two quarter-percentage-point rate reductions by 2025.
Despite the positive outlook, oil prices are still subject to fluctuations due to various factors, including the dollar’s strength and global demand trends.
Source: https://finance.yahoo.com/news/oil-prices-little-changed-ahead-023237682.html