Oil flat as weaker IEA outlook weighs on US rate cut hopes
By Mohi Narayan and Yuka Obayashi
NEW DELHI (Reuters) -Oil prices stalled on Friday over a forecast of slowing demand by the International Energy Agency after gaining in the previous session on weak U.S. retail sales data that sparked optimism that the Fed might cut interest rates sooner than expected.
Brent crude futures were down 19 cents, or 0.2%, to $82.67 a barrel at 0745 GMT. U.S. West Texas Intermediate crude futures fell 3 cents to $78 a barrel.
Both contracts climbed over 1% on Thursday as a larger-than-expected drop in U.S. retail sales prompted hopes the Federal Reserve will soon start cutting interest rates, which could be positive for oil demand.
The U.S. Commerce Department report showed retail sales dropped 0.8% in January, the biggest fall since February 2023. Economists polled by Reuters had forecast retail sales dipping 0.1%.
«Hopes for U.S. rate cuts provided support on Thursday, but investors are now adjusting their positions ahead of a long weekend in the U.S.,» said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan (OTC:NSANY) Securities, noting Feb. 19 is a U.S. holiday.
«While keeping a close eye on interest rate trends, investors will continue to assess whether geopolitical risks in the Middle East will spill over into crude supply chains,» he said, predicting WTI to trade in the $70-$80 range for a while.
Weighing on market sentiment, Paris-based International Energy Agency (IEA), the industrialised world's energy watchdog, said on Thursday that global oil demand growth was losing momentum and trimmed its 2024 growth forecast, in sharp contrast to the view held by the Organization of the Petroleum Exporting Countries (OPEC).
The IEA's monthly report said it expects global oil demand
Read more on investing.com
