Oil prices decline after US official said about postponing interest rate cuts

Oil prices fell on Friday after a Federal Reserve official said that interest rate cuts should be postponed for at least two additional months.

According to Reuters, Brent crude futures fell 25 cents, equivalent to 0.3%, to $83.42 per barrel. US West Texas Intermediate crude futures also fell 25 cents, or 0.3%, to $78.36.

Christopher Waller, a member of the US Federal Reserve’s Board of Governors, said on Thursday that Fed policymakers should postpone interest rate cuts for at least another two months to see whether the recent rise in inflation means faltering progress towards price stability or is just a passing bump in the road.

It should be noted that keeping interest rates at a higher level for a longer period leads to a slowdown in economic growth, which limits the demand for oil.

The US Central Bank has kept the interest rate at a range of 5.25-5.5% since last July, and the minutes of its policy meeting last month showed that most of its officials appear concerned about rushing to ease monetary policy.

Oil indices trimmed some of the gains they achieved yesterday, Thursday, after Waller’s comments.

Oil futures rose yesterday, Thursday, amid continuing hostilities in the Red Sea, with the Houthis escalating their attacks near Yemen.