Oil prices dropped on Thursday in Asian trade, following the Fed’s dovish economic signals, while a report suggested that OPEC+ would likely maintain output next month despite the recent plunge in prices.
By 11:55 a.m. Bangkok time, Brent oil prices fell to $76.06 per barrel, while West Texas Intermediate crude futures shed to $70.18 per barrel. Both contracts were up more than 4% from a 15-month low last week.
The Fed raised interest rates as anticipated but lowered its GDP projection for the year, prompting a three-day rally in petroleum to fizzle out.
On Wednesday, the Federal Reserve raised interest rates by 0.25%, signaling that rate hikes are coming to an end but also emphasizing caution in light of the recent banking crisis.
“The Committee will closely monitor incoming information and assess the implications for monetary policy,” wrote the FOMC’s statement after their meeting. The Committee believes that further policy tightening may be necessary to achieve a monetary policy stance that is restrictive enough to return inflation to the target of 2%.
Meanwhile, Fed Chair Jerome Powell said during a news conference that the central bank may be reaching the conclusion of its rate-hiking cycle, but he also added a warning that the fight against inflation isn’t done.
According to Reuters, the OPEC+ is expected to maintain their current output levels at their April meeting, sticking to their already planned 2 million barrel per day drop.
