Oil Prices Slip Ahead US Rate Cuts May Be Delayed By Reuters

By Noah Browning

LONDON (Reuters) – Oil prices fell on Thursday as expectations that U.S. interest rate cuts could be delayed limited gains, although positive Chinese trade data bodes well for demand from the top importer of oil in the world.

at 10.10 GMT futures fell 42 cents, or 0.5%, to $82.54 a barrel, while U.S. West Texas Intermediate crude futures fell 36 cents, or 0.4%, to 78 $.77 a barrel.

Markets were bracing for the risk that the Federal Reserve could delay its first interest rate cut until the second half of this year to stimulate the U.S. dollar, according to a Reuters poll of foreign exchange strategists.

A strong greenback eats into demand for dollar-denominated oil among buyers using other currencies.

Fed Chair Jerome Powell said on Wednesday that continued progress on inflation is “not guaranteed,” although the U.S. central bank still plans to cut its benchmark interest rate this year.

Meanwhile, China’s import and export growth beat estimates, suggesting global trade is turning a corner, sending a positive signal to policymakers as they seek to support the economic recovery.

China posted a 5.1% increase in imports in the first two months of 2024 from a year earlier to around 10.74 million barrels per day (bpd), customs data showed on Thursday, while purchases of crude oil surged to meet fuel sales during the Lunar New Year. vacation.

“China’s trade balance data is a positive sign for the oil market demand outlook,” said Auckland-based independent analyst Tina Teng.

However, he added, risk-off sentiment has dominated financial markets as stocks are retreating on Wall Street.

Brent and WTI rose about 1% on Wednesday after crude inventories rose for a sixth straight week, rising by 1.4 million barrels, about two-thirds of the 2.1 million barrel increase predicted by analysts in a Reuters poll.

Gasoline and distillate inventories fell more than expected, EIA data also showed.