Oil down amid low demand in US, Fed decision to slash number of rate cuts

By Zeynep Beyza Kilic

Oil prices declined on Thursday following data showing a build in US crude stockpiles and the US Federal Reserve's (Fed) decision to reduce the number of rate cuts to one for this year.

International benchmark Brent crude traded at $81.98 per barrel at 1.52 p.m. local time (1052 GMT), a fall of 0.75% from the closing price of $82.60 per barrel in the previous trading session.

The American benchmark West Texas Intermediate (WTI) traded at $77.83 per barrel at the same time, a 0.85% drop from the previous session that closed at $78.50 per barrel.

The Energy Information Administration announced an 0.8% increase, or by 3.7 million barrels, in US commercial crude oil inventories during the week ending June 7, against the market prediction of a 1.2 million-barrel draw.

Over the same period, strategic petroleum reserves, which are excluded from commercial crude stocks, and gasoline inventories also rose by about 300,000 barrels and 2.6 million barrels, respectively.

The build-up in inventory signals a decline in demand in the world's biggest oil-consuming country, putting downward pressure on oil prices.

In the US, despite signs of a slowdown in inflation, the Fed revised its number of rate cuts forecast for this year from three to one.

The Fed announced its monetary policy decisions and economic projections late on Wednesday. The bank did not change the policy rate in line with expectations and kept it constant at 5.25–5.50%.

Following the meeting, Fed Chairman Jerome Powell said the timing was not right to start easing monetary policy.