Oil prices traded marginally lower during Friday’s Asian session as concerns over weakening fuel demand in the United States outweighed expectations that the Federal Reserve’s first interest rate cut this year would bolster consumption.
By 3:25 pm AEST (5:25 am GMT), Brent crude futures slipped 8 cents, or 0.1%, to US$67.36 per barrel, while U.S. West Texas Intermediate (WTI) crude dropped 15 cents, or 0.2%, to US$63.42 per barrel.
Despite the pullback, Brent and WTI remained 0.5% and 0.6% higher for the week, respectively.
The Fed cut its policy rate by 25 basis points on Wednesday and signalled further easing to come as it sought to address signs of weakness in the U.S. labour market.
However, a surprise build in U.S. distillate inventories weighed on sentiment. Stockpiles rose by 4 million barrels last week, well above market forecasts of a 1.1 million-barrel increase, fuelling concerns about sluggish consumption.
Economic data added to the caution. Jobless claims showed signs of softening in both labour demand and supply, while U.S. single-family housing starts tumbled to a two-and-a-half-year low in August amid a glut of unsold properties.
Elsewhere, Putin signalled on Thursday that he is willing to raise select taxes, particularly targeting the wealthy, as Russia grapples with financing challenges in the fourth year of its war in Ukraine.
