Crude oil futures saw a decline on Thursday morning after the US Federal Reserve signaled a slower pace of interest rate cuts in 2025. As of 9:54 AM, February Brent crude futures were trading at $73.01, down by 0.52%, while January West Texas Intermediate (WTI) crude futures stood at $69.64, falling 1.33%.
In Indian markets, January crude oil futures on the Multi Commodity Exchange (MCX) were trading at ₹5,942, down 0.78% from the previous close of ₹5,989. February futures followed a similar downward trend, trading at ₹5,930, a 0.79% drop from ₹5,977.
The Federal Reserve’s move on Wednesday to cut interest rates by 25 basis points was expected, but its projection of only two additional rate cuts, each by 25 basis points, in 2025 has raised concerns. While interest rate cuts generally make dollar-denominated commodities, including crude oil, cheaper and more attractive to buyers, the Fed’s forecast of fewer cuts has sparked uncertainty regarding the future trajectory of crude oil prices in the global market.
In contrast, official data from the US Energy Information Administration (EIA) revealed a decline in US crude oil inventories for the week ending December 13. US commercial crude oil stocks dropped by 0.9 million barrels, standing at 421 million barrels—about 6% below the five-year average for this time of year.
Motor gasoline inventories increased by 2.3 million barrels from the previous week, although they remain 3% below the five-year average. Over the past four weeks, the average daily supply of motor gasoline was up by 2.1% compared to last year, averaging 8.7 million barrels per day.
US crude oil imports also rose by 665,000 barrels per day, averaging 6.6 million barrels per day for the week ending December 13. However, over the past four weeks, imports were 2.1% lower than the same period in 2023.
Elsewhere in commodities, December copper futures were trading at ₹798.30 on the MCX, a 1.26% drop from ₹808.45. On the National Commodities and Derivatives Exchange (NCDEX), January castorseed futures rose by 0.30% to ₹6,332, while April turmeric futures dropped by 0.55% to ₹13,730.
This mixed picture in the commodities market reflects broader market uncertainties stemming from the Fed’s cautious outlook on interest rate cuts and the ongoing fluctuations in global oil supply dynamics.
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