+
Oil prices surge over 2% after Fed Chair Powell signals rate cuts
OIL & GAS

Oil prices surge over 2% after Fed Chair Powell signals rate cuts

U.S. light crude oil prices surged more than 2% per barrel following remarks from Federal Reserve Chair Jerome Powell that hinted at forthcoming interest rate cuts. Brent crude futures rose by $1.80, or 2.33%, to settle at $79.02 per barrel, while U.S. West Texas Intermediate (WTI) crude futures increased by $1.82, or 2.49%, closing at $74.83 per barrel.

"The Federal Reserve's pivot is genuine," stated Phil Flynn, Senior Analyst, Price Futures Group. "It's influencing all commodities."

Earlier in the week, both oil benchmarks had plummeted to their lowest levels since early January, driven by the U.S. government's substantial downward revision of job additions for the year, which stoked recession fears.

Powell supported a more accommodative monetary policy, expressing concerns over further cooling in the job market. He also voiced optimism that inflation was nearing the Fed's 2% target.

"The risks of higher inflation have lessened, while the risks to employment have grown," Powell remarked during his keynote speech at the Kansas City Fed's annual economic conference in Jackson Hole, Wyoming. "It?s time for policy adjustments, with the timing and pace of rate cuts depending on incoming data and the evolving economic outlook."

The U.S. dollar index dipped to around 101.45 ahead of Powell's speech. A weaker dollar typically boosts demand for dollar-denominated commodities, such as oil, among investors using other currencies.

Morgan Stanley noted that a recent drawdown in oil inventories has provided some support to prices. "Currently, the oil market remains tight, with inventories decreasing by approximately 1.2 million barrels per day over the last four weeks. We expect this trend to continue through the third quarter," the bank stated.

Despite the rally, concerns linger about global oil demand, particularly due to recent data from China indicating a struggling economy and decreased demand from refiners. Additionally, ongoing ceasefire negotiations between Israel and Hamas in Gaza have helped ease supply fears, further affecting oil prices.

Meanwhile, U.S. energy companies reduced the number of active oil and natural gas rigs for a second consecutive week, according to energy services firm Baker Hughes. The number of oil rigs remained steady at 483, while gas rigs fell by one, bringing the total to 97.

(ET)

U.S. light crude oil prices surged more than 2% per barrel following remarks from Federal Reserve Chair Jerome Powell that hinted at forthcoming interest rate cuts. Brent crude futures rose by $1.80, or 2.33%, to settle at $79.02 per barrel, while U.S. West Texas Intermediate (WTI) crude futures increased by $1.82, or 2.49%, closing at $74.83 per barrel. The Federal Reserve's pivot is genuine, stated Phil Flynn, Senior Analyst, Price Futures Group. It's influencing all commodities. Earlier in the week, both oil benchmarks had plummeted to their lowest levels since early January, driven by the U.S. government's substantial downward revision of job additions for the year, which stoked recession fears. Powell supported a more accommodative monetary policy, expressing concerns over further cooling in the job market. He also voiced optimism that inflation was nearing the Fed's 2% target. The risks of higher inflation have lessened, while the risks to employment have grown, Powell remarked during his keynote speech at the Kansas City Fed's annual economic conference in Jackson Hole, Wyoming. It?s time for policy adjustments, with the timing and pace of rate cuts depending on incoming data and the evolving economic outlook. The U.S. dollar index dipped to around 101.45 ahead of Powell's speech. A weaker dollar typically boosts demand for dollar-denominated commodities, such as oil, among investors using other currencies. Morgan Stanley noted that a recent drawdown in oil inventories has provided some support to prices. Currently, the oil market remains tight, with inventories decreasing by approximately 1.2 million barrels per day over the last four weeks. We expect this trend to continue through the third quarter, the bank stated. Despite the rally, concerns linger about global oil demand, particularly due to recent data from China indicating a struggling economy and decreased demand from refiners. Additionally, ongoing ceasefire negotiations between Israel and Hamas in Gaza have helped ease supply fears, further affecting oil prices. Meanwhile, U.S. energy companies reduced the number of active oil and natural gas rigs for a second consecutive week, according to energy services firm Baker Hughes. The number of oil rigs remained steady at 483, while gas rigs fell by one, bringing the total to 97. (ET)

Next Story
Infrastructure Urban

India to Invest Rs 600 Billion to Upgrade 1,000 ITIs

As part of its drive to modernise vocational training, the Ministry of Skill Development and Entrepreneurship (MSDE), in collaboration with Gujarat’s Labour and Employment Department, held a State-Level Workshop at the NAMTECH Campus within IIT-Gandhinagar to discuss the National Scheme for ITI Upgradation.The consultation brought together key stakeholders from industry and the training ecosystem to align expectations and support implementation of the scheme, which aims to transform 1,000 Industrial Training Institutes (ITIs) across India using a hub-and-spoke model. The total outlay stands ..

Next Story
Infrastructure Urban

India Unveils Rs 600 Billion Maritime Finance Push

The Ministry of Ports, Shipping & Waterways (MoPSW) hosted the Maritime Financing Summit 2025 in New Delhi, bringing together over 250 stakeholders including policymakers, industry leaders, global investors, and financial institutions. The summit, held under the ambit of Maritime Amrit Kaal Vision (MAKV) 2047, focused on transforming India into a leading maritime power with strengthened financial, infrastructural, and technological capabilities.Union Minister Sarbananda Sonowal emphasised India's strategic progress, noting that average port turnaround times have dropped from four days to u..

Next Story
Infrastructure Urban

Govt Allocates Rs 500 Million To Boost Community Radio

The Central Government, through its ‘Supporting Community Radio Movement in India’ scheme, has allocated Rs 500 million to strengthen the community radio ecosystem across the country. The initiative aims to assist both newly established and long-operational Community Radio Stations (CRSs), ensuring their relevance to local educational, social, cultural, and developmental needs.According to the policy published by the Ministry of Information and Broadcasting, CRSs may be set up by not-for-profit organisations with at least three years of demonstrated community service. These stations are ex..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?