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Oil prices plunge on deflated US interest rate cut expectations, OPEC+ decision
Oil Price
Image Credit: Representational image from Wallpaper Cave

Oil prices plunge on deflated US interest rate cut expectations, OPEC+ decision

| @indiablooms | 08 Jun 2024, 12:55 pm

New York/IBNS: Oil prices plunged on Friday and posted a third straight weekly loss as investors weighed OPEC+ reassurances against the latest United States jobs data that lowered expectations that the Federal Reserve will cut interest rates soon, reports said.

According to reports, Brent crude futures settled 25 cents lower at $79.62 a barrel, while US West Texas Intermediate crude (WTI) edged down 2 cents to $75.53.

As per data, US jobs growth accelerated far more than expected in May, keeping the Fed on track to hold off starting to cut interest rates until September at the earliest.

On Thursday, the European Central Bank went ahead with its first interest rate cut since 2019, despite an increasingly uncertain inflation outlook, reports Reuters, adding that high borrowing costs can slow economic activity and dampen demand for oil.

According to a report by Reuters, oil prices have been buttressed by support from OPEC+ members Saudi Arabia and Russia, indicating readiness to pause or reverse oil output increases.

Crude still fell for a third straight week on demand concerns, with Brent down 2.5 percent and WTI off 1.9 percent, as per reports.

Oil dipped earlier this week after analysts saw Sunday's OPEC+ meeting as an indication of rising supply, which is bearish for prices, Reuters reported.

Meanwhile, in China, although exports grew for a second month in May, crude oil imports fell, signalling demand concerns in the world's largest crude oil buyer, as per data.

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