Oil prices fell for a second trading session on Thursday after the US Federal Reserve cut interest rates as expected, and traders focused on concerns about the US economy and oversupply, UNN reports with reference to Reuters.
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At 04:17 GMT (07:17 Kyiv time), Brent crude futures fell 13 cents, or 0.19%, to $67.82 a barrel. US West Texas Intermediate crude futures fell 18 cents, or 0.28%, to $63.87.
On Wednesday, the Fed cut its key rate by a quarter of a percentage point and said it would gradually lower borrowing costs through the end of the year, responding to signs of labor market weakness.
Lower borrowing costs typically stimulate oil demand and price growth.
However, the latest decision and the hint of two more cuts this year have already been priced in, noted Priyanka Sachdeva, senior market analyst at Phillip Nova.
"The markets' attention was drawn not only to the easing, but also to Powell's pessimistic statement," she said, referring to Fed Chairman Jerome Powell.
"He highlighted the weakening labor market and persistent high inflation, which made the rate cuts look more like a risk management attempt than a demand stimulus," she pointed out.
Evidence of further Fed rate cuts signals that policymakers are assessing the risk to the economy from unemployment as higher than the risk from inflation, said Claudio Galimberti, senior vice president of analysis at Rystad Energy, in a client note.
Persistent oversupply and low fuel demand in the US, the world's largest oil consumer, also put pressure on the market.
As data from the Energy Information Administration showed on Wednesday, US crude inventories fell sharply last week, as net imports dropped to a record low and exports jumped to a nearly two-year high. However, a 4 million barrel increase in distillate inventories, against market expectations of 1 million barrels, raised concerns about demand from the world's largest oil consumer and put pressure on prices.