Oil prices fell on Wednesday as renewed worries over a slowing global economy and shifting monetary policy expectations overshadowed earlier optimism. Initial gains had been fueled by US President Trump’s dismissal of recession risks and expectations of a Federal Reserve rate cut, but fresh data has altered the market outlook.
Brent crude dropped 0.07% to $69.57 per barrel, while West Texas Intermediate (WTI) fell 0.03% to $66.29 per barrel. Analysts attribute the decline to cautious economic projections, revised Fed policy expectations, and stabilized supply conditions.
Trump had earlier reassured markets, suggesting that current economic transitions would ultimately bolster US prosperity and oil demand. However, concerns over potential economic slowdowns due to US tariffs on major trading partners have overshadowed those reassurances.
Market sentiment shifted as expectations of a 25-basis-point Fed rate cut in June were revised. Analysts now suggest that the Fed may hold rates steady or even tighten policy to counter inflation, strengthening the US dollar and reducing oil’s attractiveness.
Meanwhile, fears of supply disruptions due to Ukraine’s drone attacks on Moscow have faded. Russian officials have downplayed the impact, reassuring markets that refining and production remain stable. Andriy Kovalenko, head of Ukraine’s Center for Countering Disinformation, confirmed that while initial concerns were valid, the likelihood of mass disruptions has significantly decreased. These developments have contributed to the cooling of oil prices despite earlier geopolitical tensions.
