Oil lost strength in the final stretch of trading with the cut in US interest rates and escalation of tension in the Middle East (Image: REUTERS/Stringer/Archivo)
O oil remained practically stable this Wednesday (18). During most of the session, the commodity operated slightly higher, but lost strength soon after the Federal Reserve, the Central Bank of the United States, cut interest rates for the first time since March 2020.
The most liquid contracts of the Brent oila reference for the international market, for November, ended the day down 0.06%, at US$ 73.65 per barrel, on the Intercontinental Exchange (ICE), in London.
The contracts of the West Texas Intermediate oil (WTI) for November fell 0.11%, to US$ 69.88 a barrel, on the New York Mercantile Exchange (Nymex), in the United States.
What moved oil today?
Investors had a busy day.
In the United States, oil inventories fell by 1.63 million barrels in the week to September 13, according to data from the Department of Energy (DoE). The expectation was a decline of 1 million barrels in the period.
In addition, the Federal Reserve cut interest rates for the first time in more than four years. The U.S. central bank reduced the Fed Funds rate by 50 basis points to 4.75% to 5.00%.
“The (Federal Open Market) Committee has gained greater confidence that inflation is moving sustainably toward 2 percent and judges that the risks to achieving its employment and inflation goals are roughly balanced,” the statement said.
Only Director Michelle Bowman, among the eleven members of the FOMC, defended a cut of just 0.25 percentage points.
Generally speaking, lower interest rates generally stimulate economic growth, which drives demand for oil.
The market is also monitoring the level of tension in the Middle East.
Portable radios used by Hezbollah detonated late Wednesday afternoon (18) in southern Lebanon and the southern suburbs of Beirut, a security source told Reuters.
The move comes a day after similar explosions launched through the pagers of the group.
At least one of the blasts occurred near a funeral organized by Iran-backed Hezbollah for those killed the previous day, when thousands pagers used by the group exploded across the country and injured many of the group's fighters.
Hezbollah, which was briefly thrown into disarray by attacks by pagerssaid it had hit Israeli artillery positions with rockets, the first attack against its arch-enemy since explosions wounded thousands of its personnel in Lebanon and raised the prospect of a wider war in the Middle East.
*With information from Reuters.