Oil futures fell nearly 1%, closing below $70 per barrel. This decline was driven by expectations that the Federal Reserve will reduce the frequency of interest rate cuts, which has strengthened the U.S. dollar. The Fed's recent rate cut was anticipated, but projections indicate a smaller rate reduction in 2025. As a result, the dollar reached a two-year high, diminishing the appeal of commodities priced in the currency.
Since mid-October, oil prices have been fluctuating within a narrow range, potentially marking the narrowest annual price range since 2020. As 2025 approaches, traders are balancing concerns of potential oversupply against geopolitical risks.
WTI crude for January delivery fell 1% to $69.91 per barrel, with the contract expiring soon. The more actively traded February contract decreased by 0.9% to $69.38 per barrel. Brent crude dropped 0.7%, settling at $72.88 per barrel.
