Oil prices dropped on Friday as worries about large supplies and declining demand outweighed expectations that the year’s first interest-rate cut by the U.S. Federal Reserve would trigger more consumption.
Brent crude futures settled at $66.68 a barrel, down 76 cents or 1.1%. U.S. West Texas Intermediate futures finished at $62.68, down 89 cents or 1.4%.
Both benchmarks fell for the week.”Oil supplies continue to remain robust and OPEC is reducing its oil production cuts,” said Andrew Lipow, president of Lipow Oil Associates.
“We haven’t seen an impact on Russian crude oil exports” from sanctions. The Fed cut its policy rate by a quarter of a percentage point on Wednesday and indicated that more cuts would follow as it responded to signs of weakness in the U.S. jobs market.
Lower borrowing costs typically boost demand for oil and push prices higher. John Kilduff, partner with Again Capital, said future Fed rate cuts of a quarter of a percentage point would likely not boost oil markets because they would further weaken the dollar, making oil more expensive to buy.
