Profit-taking pressures oil prices despite Middle East tensions and a surprise draw in US crude inventories.
West Texas Intermediate crude fell to $82.80 in early Asian trading Thursday, retreating from $83.00 as traders took profits following the Federal Reserve’s decision to hold interest rates steady at 3.5%-3.75%. The move came despite escalating Middle East hostilities, which typically support oil prices.
The Fed’s July policy meeting left rates unchanged, aligning with market expectations. Fed Chair Kevin Warsh indicated no forward guidance on rate policy but reaffirmed the central bank’s commitment to its 2% inflation target. Meanwhile, geopolitical risks persist, with US strikes on Iran-backed militias and Houthi rebels threatening Red Sea oil flows.
US crude inventories declined by 7.167 million barrels last week, exceeding forecasts, while distillate stocks dropped by 2.011 million barrels. Gasoline inventories rose by 2.5 million barrels, per preliminary data.