Oil Prices Fall on Monday (February 19) as Market Absorbs Fed Officials' Comments on Patience Regarding Rate Cuts Amid Thin Holiday Trading

At the close of trading on February 19, Brent crude oil contracts fell 58 cents (or 0.69%) to $82.89 per barrel. WTI crude oil contracts lost 35 cents (or 0.44%) to $78.84 per barrel.

The market has yet to gauge demand trends from China following the country’s return from a week-long Lunar New Year holiday, while the U.S. Presidents' Day holiday has led to relatively subdued trading.

Following a week of disappointing U.S. economic data – showing rising inflation alongside declines in retail sales and factory production – Fed policymakers signaled a "patient" stance on rate cuts on February 16. Higher interest rates increase the cost of purchasing oil, leading to a downward market trend.

ANZ Research analysts noted that the Organization of the Petroleum Exporting Countries (OPEC) could address “most levels of disruption” as the organization’s spare capacity is at its highest in 8 years, at 6.4 million barrels per day.

ANZ also stated: “The market is also reminded of uncertain demand prospects, with the International Energy Agency (IEA) warning that growth is expected to slow in 2024.” The agency also forecasts a market surplus this year.

Source: Vietstock