Oil prices edged lower on Thursday after the Federal Reserve (Fed) cut interest rates for the first time this year, even as US government data showed a draw in crude inventories.
Brent crude traded at $67.30 a barrel at 9.57 a.m. local time (0657 GMT), down 0.37% from the previous close of $67.55.
US benchmark West Texas Intermediate (WTI) decreased by 0.39% to $63.39 from $63.64 in the prior session.
Prices retreated after the Fed lowered its policy rate by 25 basis points on Wednesday, the first cut of 2025.
Fed Chair Jerome Powell described the move as a "risk-management cut," calling it an insurance step against further weakness in the labor market.
"The marked slowing in both the supply of and demand for workers is unusual in this less dynamic and somewhat softer labor market," he said.
Powell added that the slowing in the job market is mostly due to lower immigration and lower labor force participation.
Also touching on the tariff issue and its effect on inflation, Powell said changes to government policies continue to evolve and their effects on the economy remain uncertain.
Analysts say lower rates often support oil demand, but added that markets have largely priced in expectations for two more cuts this year.
- US crude stocks tumble 9.3 million barrels as exports surge
Meanwhile, US commercial crude oil inventories fell by 2.2% in the week ending Sept. 12, according to data from the Energy Information Administration (EIA) released late Wednesday.
Stocks dropped by 9.3 million barrels to 415.4 million, defying market expectations of a 1.4 million-barrel increase.
"The big drop in crude stocks came despite a slowdown in refinery runs," Daniel Hynes, a senior commodity strategist at the Australia and New Zealand Banking Group, said in a note.
"This was driven by exports, which surged above 5mb/d to the highest level since December 2023," Hynes added.
EIA data also showed that US crude oil production declined by 13,000 barrels per day to around 13.48 million bpd during the same week.
By Handan Kazanci
Anadolu Agency
energy@aa.com.tr