On Thursday (September 19) during the early Asian session, international oil prices initially surged before declining. U.S. crude oil futures traded around $70.28 per barrel. Previously, the Federal Reserve's unexpected 50 basis point rate cut sparked concerns about the health of the U.S. economy, putting downward pressure on oil prices. Additionally, comments from Fed Chairman Powell led to a rebound in the U.S. dollar, further depressing oil prices.
Although rate cuts usually stimulate economic activity and energy demand, increased concerns about a slowdown in the labor market have limited the upward momentum of oil prices. Meanwhile, even though U.S. crude oil inventories fell by 1.6 million barrels to their lowest level in a year, the market attributed this to short-term weather factors, offering limited support to oil prices.
In other geopolitical events, tensions in the Middle East and Ukraine's drone attacks on Russia have also drawn market attention. However, weak overall oil demand and ongoing pressure from the economic slowdown in Asia suggest that oil prices face further downside risks in the short term.
