Oil prices down with uncertainty over US Fed rate cut

ANKARA

Oil prices declined on Monday amid uncertainty over the timing of the US Federal Reserve's (Fed) interest rate cuts and last week’s profit taking from five-month high prices.

International benchmark Brent crude traded at $89.94 per barrel at 10.33 a.m. local time (0733 GMT), a 0.56% decline from the closing price of $90.45 per barrel in the previous trading session.

The American benchmark West Texas Intermediate (WTI) traded at $85.14 per barrel at the same time, a 0.61% drop from the previous session that closed at $85.66 per barrel.

Prices reached five-month highs last week over global oil supply concerns due to tensions in the Middle East.

A missile strike on the Iranian Consulate in the Syrian capital, Damascus, resulted in the killing of a top commander of Iran's Islamic Revolutionary Guard Corps and six other officers on April 1.

The situation exacerbated tensions in the region, where busy energy supply routes are located.

Iran's Islamic Revolutionary Guard Corps (IRGC) launched a barrage of drones and missiles at Israel late on Saturday in response to the attack on the Iranian Consulate.

Prices lost some steam with increasing diplomatic efforts to reduce tensions between Iran and Israel.

Following the attacks, US Secretary of State Antony Blinken said that the US "does not desire more conflict in the region" during a meeting with foreign ministers from Türkiye, Saudi Arabia, Egypt, Jordan, and the UK to discuss the situation.

This statement aided the fall in prices by feeding hopes of easing regional tensions and a likely end to supply disruptions.

At the beginning of the week, however, uncertainty over the timing of the US Fed's interest rate cuts combined with Fed officials’ statements put downward pressure on prices.

The bank wants to see more "confidence" that inflation is moving lower to its 2% target before beginning to cut interest rates, according to minutes of its recent meeting released last week.

During the Fed's next two-day meeting, set for May 1, the bank is expected to keep the federal funds rate unchanged.