Oil declines because of uncertainty of interest rate cuts in America

Oil prices fell in Asia on Wednesday, as the possibility of delaying US interest rate cuts and rising US crude inventories outweighed the support prices received on Tuesday from news of the possibility of OPEC+ extending production cuts.

According to Reuters, Brent crude futures fell 30 cents, or 0.36%, to $83.35 per barrel by 0302 GMT, and US West Texas Intermediate crude futures fell 28 cents to record $78.59 per barrel.

Michelle Bowman, a member of the US Federal Reserve (central bank), said on Tuesday that she is in no hurry to lower US interest rates, especially in light of the upward risks of inflation that may hinder progress in controlling price pressures or may lead to their reappearance.

Three OPEC+ sources said that the alliance will consider extending the voluntary oil production cuts in the second quarter of 2024 to provide additional support to the market, and two of them reported that they may keep the cuts until the end of the year.

The Organization of the Petroleum Exporting Countries and its allies, led by Russia, agreed in November to voluntary cuts amounting to a total of about 2.2 million barrels per day during the first quarter of this year, which included Saudi Arabia extending its voluntary reduction in production.