Crude Oil Declines Amid US Slowdown Fears, Demand Concerns

(RTTNews) - Crude oil fell on Thursday even after yesterday's highly anticipated 25-basis-point rate cut by the US Federal Reserve since the Fed had hinted at a slowdown by the US economy.

WTI Crude Oil for October delivery was last seen trading down by $0.46 (or 0.72%) at $63.59 per barrel.

On the geopolitical front, as the Russia-Ukraine war intensifies, Ukrainian drone strikes ignited a fire at a major oil and petrochemical facility, Gazprom Neftekhim Salavat - Russia's 10th largest refinery - in the Republic of Bashkortostan. The extent of the damage not yet known.

Ukraine has hit at least 10 Russian refineries since early August. Traders are concerned about supply side disruptions from Russia if the attacks persist.

US President Donald Trump has been pushing the pedal harder on NATO nations to stop importing Russian oil, whereby he intends to cut the monetary gains for Russia and thereby force the country to a ceasefire.

Trump also urged them to consider 50% to 100% tariffs on China, a major purchaser of Russian oil. The US has already hit India with 25% "penalty tariffs" to discourage its Russian oil purchases.

However, NATO member-nations have so far been unresponsive to Trump's call.

Qatar has been hosting and mediating ceasefire talks between Israel and Hamas since 2023 Gaza war broke out.

Last week, Israeli Defense Forces orchestrated an aerial strike on Doha, Qatar, targeting Hamas leaders sheltering there. The attacks brought Arab and Muslim leaders together in solidarity with Qatar as they condemned the strikes.

However, Israel has threatened to continuing attacking Hamas leaders "wherever they are."

These geopolitical tensions in Europe and Middle East have contributed to some recent upside for oil prices.

US Energy Information Administration data yesterday revealed a mixed bag for the week ending September 12 as crude oil stocks in the US decreased by 9.285 million barrels and gasoline stocks slipped by 2.347 million barrels but distillate stocks increased by 4.0 million barrels.

Data from American Petroleum Institute yesterday revealed that US crude oil inventories fell by 3.42 million barrels for the week ending September 12.

At the end of a two-day monetary policy meeting of the US Federal Open Market Committee, yesterday, the US Federal Reserve initiated the much-anticipated interest rate cuts.

The federal funds rate was reduced by 25 basis points, lowering borrowing costs to the 4.00% to the 4.25% range.

As the rate cut was largely expected, concerns about a slowdown in the economy worked on the downside for oil prices.