By Georgina McCartney
(Reuters) – Oil prices fell in early trading on Thursday as investors digested the news that the U.S. Federal Reserve chose not to cut interest rates in the near future, while ample oil and oil stocks US fuels weighed even more on the market.
Brent crude futures lost 14 cents, or 0.17%, to $82.46 a barrel by 00:39 GMT, and West Texas Intermediate (WTI) crude futures fell 16 cents, or 0.2%, to $78.34. Both benchmarks gained around 0.8% in the previous session.
The Federal Reserve held interest rates steady on Wednesday and delayed the start of rate cuts until perhaps December.
Higher financing costs tend to slow economic growth and may, by extension, limit oil demand.
Fed Chairman Jerome Powell noted at a news conference after the end of a two-day policy meeting that inflation has fallen without a major hit to the economy, and said there is no reason to think it cannot continue.
Traders are also keeping an eye on ongoing negotiations for a ceasefire in Gaza, which, if resolved, would ease fears of potential supply disruptions to the oil-producing region.
In the latest attack on shipping, Iran-allied Houthi militants on Wednesday claimed responsibility for small boat and missile attacks that left a Greek-owned coal carrier in need of rescue near Yemen’s Red Sea port of Hodeidah. .
The militant group has been attacking international shipping in the Red Sea region since November, in solidarity with Palestinians in the war between Israel and Hamas.
On Wednesday night, the Palestinian militant group Hamas issued a statement underlining its “positivity” in the ceasefire negotiations.
He urged the US to pressure Israel to accept a deal that would lead to a permanent ceasefire in Gaza, as well as the full withdrawal of the enclave, reconstruction and the release of Palestinian prisoners.
US Secretary of State Antony Blinken said Hamas proposed numerous changes to a US-backed ceasefire proposal, adding that mediators were determined to plug the gaps.
On the supply side, U.S. crude oil inventories rose more than expected last week, driven largely by a jump in imports, while fuel inventories also rose more than expected, data from the U.S. Administration showed. Energy Information (EIA) this Wednesday.
(This story has been refiled to correct the day in paragraph 1)
(Reporting by Georgina McCartney in Houston; Editing by Sonali Paul)
