Global oil markets saw little movement on Friday as optimism from the US Federal Reserve’s interest rate cut was overshadowed by growing worries about fuel demand in the United States.
Brent crude futures slipped a marginal 1 cent to $67.43 a barrel, while US West Texas Intermediate (WTI) futures dropped 4 cents to $63.53 as of 0100 GMT. Despite the dip, both benchmarks were on track to log their second consecutive weekly gain.
The Fed cut its policy rate by a quarter percentage point on Wednesday, its first reduction this year, signaling that more cuts could follow amid signs of a cooling labor market. Lower interest rates usually stimulate borrowing and economic activity, which can boost oil demand.
However, a surprise jump in US distillate stockpiles—up by 4 million barrels versus expectations of a 1-million-barrel increase—raised alarms about weakening consumption in the world’s largest oil consumer. “Gains in the USD and US long-end yields further undermined support for crude oil,” noted Tony Sycamore, analyst at IG.
The US dollar index strengthened 0.43% to 97.37, further pressuring oil prices by making crude more expensive for buyers using other currencies.
Adding to the bearish sentiment, US jobless claims data suggested a softening labor market, while new single-family home construction plunged to its lowest level in nearly two and a half years, hinting at broader economic headwinds.
On the supply side, Russia—currently the world’s second-largest crude producer—announced measures to shield its state budget from price volatility and sanctions, providing some stability to global output expectations. Meanwhile, analysts noted that President Trump’s comment favoring lower oil prices over sanctions on Russia also helped calm fears of supply disruptions.
Overall, the oil market remains in a delicate balance as traders weigh supportive monetary policy moves against demand-side risks and economic uncertainty.