On Friday, oil prices fell nearly 3% after a Federal Reserve official suggested interest rates might not be reduced for at least another two months.
Brent crude futures went down $2.05, reaching $81.62 a barrel. Similarly, U.S. West Texas Intermediate (WTI) futures decreased by $2.12, landing at $76.49.
Throughout the week, Brent’s value dropped about 2%, and WTI’s value fell over 3%. Yet, strong demand for fuel and worries about supply could push prices up soon.
Fed Governor Christopher Waller mentioned that rate cuts in the U.S. might wait a few more months.
Such delays can slow down economic growth. Consequently, the demand for oil might decrease.
Since last July, the Fed has maintained its main rate between 5.25% and 5.5%. Last month’s meeting notes showed concerns among many members. They feared easing policy too soon.
This situation matters because oil prices affect global economies. High oil prices can lead to increased costs for goods and services.
Conversely, low oil prices can reduce inflation pressure but might signal weak demand. Delays in interest rate cuts reflect caution in stimulating the economy.
They also indicate a focus on controlling inflation over boosting growth.
This careful approach shows the complex balance central banks must maintain to support a healthy economy.