Oil Prices Surge Amid Supply Worries & Fed Caution

17 Jan 2025 , 09:23 AM

Due to worries about a tighter supply after U.S. sanctions on Russian oil producers and indications of possible interest rate cuts from a Federal Reserve member, oil prices rose on Friday, set for a fourth weekly increase.

After falling 0.9% the day before, Brent crude futures increased 13 cents, or 0.2%, to $81.42 per barrel. After falling 1.7% on Thursday, U.S. West Texas Intermediate oil futures were up 27 cents, or 0.3%, to $78.95 a barrel.

With the Houthi group in Yemen predicted to stop attacking ships in the Red Sea, both contracts decreased on Thursday. With Brent up 9% and WTI up 10% so far this year, they are still on track for a fourth weekly increase.

Following more extensive actions against Russian oil producers and tankers, investors are evaluating the Biden administration’s most recent round of penalties aimed at Russia’s military-industrial backbone and efforts to evade sanctions.

Now, Moscow’s biggest clients are searching the world for new barrels, which is driving up shipping costs.

In response to recent market wagers on a shallower rate path, Federal Reserve Governor Christopher Waller stated on Thursday that inflation is likely to continue to fall and may even enable the U.S. central bank to drop interest rates sooner and faster than anticipated.

With colder weather forecasted for the Martin Luther King Jr. Day holiday weekend, natural gas futures in the United States surged almost 4% to a two-year high on Thursday.

For feedback and suggestions, write to us at [e-mail]