Oil prices drop on worries about interest rate hikes
Oil prices fell on Thursday due to concerns about slow demand and the possibility of elevated US interest rates, Reuters reported.
Brent crude futures dropped 0.2 per cent to $83.54 a barrel, while US West Texas Intermediate crude futures were down 0.1 per cent to $78.50 a barrel.
US crude oil stockpiles increased by 4.2 million barrels to 447.2 million barrels, raising worries about a slow economy and reduced oil demand in the US.
The anticipation of delayed US rate cuts also weighed on market sentiment, as it could undermine oil demand.
Traders are now waiting for the US personal consumption expenditures price index, expected to show prices ticked up 0.3 per cent on a monthly basis in January.
The market is also eyeing the possible extension of voluntary oil output cuts from OPEC+.
ANZ analysts project 2024 annual average prices at $86 a barrel for Brent and $81 a barrel for WTI, while the conflict in the Middle East is expected to keep a floor under oil prices.
The conflict in the Middle East is expected to support oil prices. Hamas has called on Palestinians on Wednesday to march to Jerusalem’s Al-Aqsa Mosque at the beginning of Ramadan, escalating negotiations for a truce in Gaza.
However, both Israel and Hamas have downplayed the likelihood of a truce, and Qatari mediators have stated that the most contentious issues remain unresolved.
