Crude oil prices drop 5% in 2 sessions on sharp rise in US inventories, down 10% from April peaks

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Also Read: India's oil import bill could rise to $101-104 billion in FY25, says ICRA report Additionally, the EIA reported a notable rise in US crude oil production to 13.15 million barrels per day in February, up from 12.58 million bpd in the previous month. This marks the most significant monthly increase in almost three-and-a-half years. In just two sessions in May, both Brent and Crude futures experienced a 5% decline.

This drop follows last month's surge to the highest levels since October, which was prompted by Iran's unprecedented attack on Israel. The attack was seen as a response to a suspected Israeli strike on the Iranian Consulate in Damascus, Syria, earlier in the month. In the subsequent sessions, prices moderated as tensions between Israel and Iran did not escalate as anticipated by the markets.

Additionally, the Federal Reserve's indication in its latest meeting that interest rates will remain higher for longer also influenced prices. Also Read: Over 25 Nifty 500 stocks gained between 20-58% in April. Details here This stance is expected to keep the dollar index elevated, thereby increasing expenses for countries reliant on crude oil imports.

In April 2024, the Federal Reserve opted to maintain the fed funds rate at its current level of 5.25% – 5.5%, marking the sixth consecutive meeting without a change, as widely anticipated by the market. The Federal Reserve signalled new worries regarding inflation while suggesting that it would probably maintain higher borrowing costs for an extended period. Chair Jerome Powell remarked that it's improbable for the Fed to raise interest rates next, emphasising the need for convincing evidence indicating that current policy measures are not sufficiently restrictive to