Oil prices drop as US Fed signals cautious rate cuts, dollar strengthens

( MENAFN ) Oil prices declined on Friday following signals from the US Federal Reserve of a more measured approach to interest rate reductions next year, alongside the strengthening of the US dollar. The international benchmark brent crude fell 0.15 percent to USD72.

10 per barrel at 11:09 a.m. local time (0809 GMT), down from the previous session's close of USD72.



21. US benchmark West Texas Intermediate also dropped 0.26 percent to USD68.

87 per barrel, compared to USD69.05 at the close of the prior session. During this week's meeting, the Fed indicated that any future interest rate cuts would be gradual and dependent on incoming economic data and conditions, as stated in their Wednesday announcement.

The prospect of a slower pace of rate cuts has bolstered demand for the US dollar, which has also been fueled by expectations that the tax cuts, immigration controls, and import tariffs promised by President-elect Donald Trump, set to take office on January 20, will drive inflation in the US. As a result, the US dollar index surged to its highest level in two years, reaching 108.125 on Friday.

The strong dollar is anticipated to reduce oil demand by making it more expensive for buyers using other currencies. MENAFN21122024000045016755ID1109019655 Legal Disclaimer: MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article.

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