NEW YORK- Oil prices fell nearly 3 percent lower on Friday and posted a weekly decline after a US central bank policymaker indicated interest rate cuts could be delayed by at least two more months.
Brent crude futures settled down $2.05, or 2.5 percent , at $81.62 a barrel, while US West Texas Intermediate crude futures (WTI) were down $2.12, or 2.7 percent , to $76.49.
For the week, Brent declined about 2 percent and WTI fell more than 3 percent . However, indications of healthy fuel demand and supply concerns could revive prices in the coming days.
Federal Reserve policymakers should delay US interest rate cuts by at least another couple of months, Fed Governor Christopher Waller said on Thursday, which could slow economic growth and curb oil demand.
The Fed has held its policy rate steady in a 5.25 percent to 5.5 percent range since last July. Minutes of its meeting last month show most central bankers were worried about moving too quickly to ease policy.
“The entire energy complex is reacting, because if inflation begins to come back it will slow demand for energy products,” said Tim Snyder, economist at Matador Economics.
“That is not something the market wants to digest right now, especially as it is trying to figure out a direction,” he added.
Some analysts, however, say demand has remained largely healthy despite the impact of high interest rates, including in the United States.
JPMorgan’s demand indicators are showing oil demand rising by 1.7 million barrels per day (bpd) month over month through Feb. 21, its analysts said in a note.
“This compares to a 1.6 million bpd increase observed during the prior week, likely benefiting from increased travel demand in China and Europe,” the analysts said. – Reuters
