On Tuesday, the Federal Reserve put the brakes on oil prices when it suggested waiting months longer before implementing any rate cuts as inflation figures fail to paint a clear picture
The U.S. crude oil benchmark, West Texas Intermediate WTI has fallen well below the $80 mark it surpassed at the beginning of the week, with Brent crude also losing ground around $82 per barrel as inflation concerns once again took center stage. At 145 p.m. ET on Wednesday, WTI was trading down 0.92% on the day, trading at $77.94, while Brent crude was trading down 0.81% at $82.21 per barrel. .
Lower interest rates typically reduce borrowing costs and often lead to an increase in industrial activity and, hence, energy consumption. Interest rates continue to fall, but the decline is not fast enough for analysts to be assured of rate cuts this summer. At the same time, the Fed’s unwillingness to cut rates essentially helps keep inflation higher by holding down consumer spending.
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