Oil prices have declined by 1% after the US Federal Reserve cut interest rates but lessened hopes for a string of cuts.
Brent crude futures, the international benchmark, declined $0.62 to $64.43 a barrel, while US West Texas Intermediate (WTI) crude fell $0.67 at $57.91 a barrel, Reuters reported.
For the first time since 2008, the US Federal Reserve cut interest rates, but the US central bank head said this might not be the start of a lengthy series of cuts to prop up the economy against risks such as weakening global economy.
Oil prices witnessed a further fall as discussions between the US and China concluded without apparent progress towards resolving a trade war.
Further, the fall in oil prices came despite a bigger-than-expected decline in crude inventories in the US and a drop in production among OPEC members.
IHS Singapore senior partner Victor Shum was quoted by Reuters as saying: “Supply is plentiful and demand growth is showing signs of weakening globally because of trade conflicts, Brexit and other events that tend to potentially weaken economic growth and, hence, oil demand.”
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“US output is growing strongly and in addition to that there is enough spare capacity in Saudi Arabia alone to offset any significant supply disruptions.”
According to a monthly poll by Reuters, in 2019 oil prices are expected to be range-bound near existing levels as weak economic growth and the protracted Sino-US trade war limit demand.
Meanwhile, US and China negotiators concluded a round of trade talks without visible signs of progress. The meeting has been put off until September 2019.