Crude oil prices slipped Thursday, as worries about the global economy weighed and equity markets were under pressure as uncertainty over the outlook for U.S. interest rate cuts left investors worried, Kallanish Energy reports.
U.S. West Texas Intermediate crude fell 33 cents, to $55.35 per barrel, while Brent crude lost 39 cents, to $59.91/Bbl.
Traders are awaiting a speech from Federal Reserve Chair Jerome Powell today in Jackson Hole, Wyoming, that could indicate whether the U.S. central bank will continue to cut interest rates.
U.S. stocks turned lower Thursday as the first contraction in the manufacturing sector in nearly a decade was reported, and after Philadelphia Federal Reserve Bank president Patrick Harker said he does not see the case for additional stimulus.
The Jackson Hole speech is important for oil as signals from the Fed on monetary easing affect the U.S. dollar. A weaker U.S. currency tends to support oil prices, and the dollar eased on Thursday against a basket of currencies.
Concerns over the impact of the trade tensions between Washington and Beijing on the U.S. economic expansion, the longest on record, prompted the Fed to cut interest rates last month for the first time since 2008. The prolonged trade spat has sparked worries about growth in oil demand.
Forecasters such as the International Energy Agency have been lowering forecasts for world oil demand.
The price of Brent is up roughly 13% this year, supported by supply cuts by Opec+, which includes most Opec members along with 10 non-Opec producers led by Russia, and export cuts affecting Iran and Venezuela due to U.S. sanctions.
Iran said Wednesday if its oil exports are cut to zero, international waterways would not have the same security as before, cautioning Washington against raising pressure on Tehran.
Also lending some support to prices, inventories at Cushing, Oklahoma, the delivery point for U.S. crude oil futures, fell by roughly 1.5 million barrels between Friday and Tuesday, traders said, citing data from market intelligence firm Genscape.
Stockpiles at the storage hub have fallen for seven straight weeks, according to government data.
This post appeared first on Kallanish Energy News.