Oil prices fell nearly 3 percent on Friday, posting a weekly decline after the U.S. central bank policymaker said interest rate cuts could be delayed for at least another two months.
Brent crude futures fell $2.05, or 2.5%, to $81.62 per barrel, while WTI crude oil futures fell $2.12, or 2.7%, to $76.49.
Every week, Brent fell nearly 2% and WTI fell more than 3%. However, healthy fuel demand and supply concerns may revive prices in the coming days.
The Fed President said there is ‘no rush’ to lower interest rates, which could slow economic growth and limit oil demand.
The Fed has kept its policy rate from 5.25% to 5.5% since last July. Minutes of last month’s meeting show most central bankers are concerned about moving too quickly to ease policy.
If inflation starts to return, demand for energy products will slow. That’s not something the market wants to digest right now as it tries to find direction.
But some analysts say demand remains largely healthy despite higher interest rates, including in the US.
Analysts said it showed oil demand rising by 1.7 million barrels per month (bpd) through February 21. This is likely due to increased travel demand in China and Europe, compared to the 1.6 million barrel per day increase observed in the previous week.
Meanwhile, Gaza ceasefire talks were continuing in Paris, the most serious move in weeks to stop the conflict in Palestine and ensure the release of hostages.
Ceasefire talks may encourage the market to predict that geopolitical tensions will ease. However, tensions in the Red Sea continued; Attacks by Houthi militants near Yemen on Thursday diverted more shipping vessels from the trade route.
US oil rigs rose by six to 503 weekly since November,
U.S. energy firms added the most oil rigs this week since November and the most in a month since October 2022, Baker Hughes said.
