Oil prices slipped on Thursday as investors digested the U.S. Federal Reserve’s decision to likely push back an interest rate cut to December and as U.S. crude and fuel stocks rose.
Brent crude futures were down 43 cents, or 0.5%, to $82.17 a barrel, while West Texas Intermediate (WTI) U.S. crude futures fell 46 cents, or 0.6%, to $78.04. Both benchmarks had gained nearly 1% in the previous session.
The Fed held rates steady on Wednesday and pushed out the start of policy easing to perhaps as late as December. Higher borrowing costs tend to dampen economic growth, which can limit oil demand.
“In the Fed’s view this is the price that needs to be paid to achieve a soft landing and avoid recession beyond doubt,” said PVM Oil analyst Tamas Varga.
On the supply side, U.S. crude stockpiles rose more than expected last week, driven largely by a jump in imports, while fuel inventories also increased more than anticipated, according to data from the Energy Information Administration.
Additionally, the International Energy Agency warned of excess supply in the near future, which also weighed on prices.
Traders are also monitoring ongoing talks for a ceasefire in Gaza, which, if resolved, could reduce fears of potential oil supply disruptions from the region. However, Iran-allied Houthi militants recently took responsibility for small craft and missile attacks that left a Greek-owned coal carrier in need of rescue near Yemen’s Red Sea port of Hodeidah.
U.S. Secretary of State Antony Blinken said Hamas had proposed numerous changes to a U.S.-backed proposal for a ceasefire, adding that mediators were determined to close gaps in the negotiations.