Oil steady after US Fed cuts interest rates

Brent crude’s price remained largely steady after the US Fed cut interest rates at its latest policy meeting.

IMAGE: The US Fed's headquarters with US dollar bills in the background. Getty Images

In a largely anticipated move, the US Federal Open Market Committee (FOMC) cut its key interest rate by 25 basis points, to a range between 4-4.25%.

The decision was “widely anticipated,” VANDA Insights’ founder and analyst Vandana Hari remarked.

Lower interest rates in the US can boost demand growth by making dollar-denominated commodities like oil more affordable for holders of other currencies.

This marks the first interest rate cut in 2025. The US central bank has signalled more cuts to follow in the year.

“Investors cheered the beginning of the [Fed] rate cut cycle,” remarked ANZ Bank’s senior commodity strategist Daniel Hynes.

In December last year, the Fed had cut its interest rate by 25 basis points. The cut was supported by the US central bank’s latest inflation reading, which is gradually approaching its 2% target.

By Aparupa Mazumder

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