ISLAMABAD (TDI): Oil prices dropped in Asian trading, following significant interest rate cut by the Federal Reserve, which raised concerns about the state of the US economy.
Brent crude futures for November dropped 34 cents (0.46%) to $73.31 a barrel, while WTI crude futures for October decreased by 42 cents (0.59%) to $70.49 a barrel.
Oil Prices Fell
The Fed’s decision to cut rates by half a percentage point suggested a slowdown in the job market, overshadowing the typical economic boost that rate cuts bring.
Analysts said that the Fed’s actions indicated significant economic headwinds, leaving bearish investors unsatisfied with the bank’s raised medium-term rate outlook.
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Adding to the downward pressure on prices was ongoing weak demand from China.
Recent data showed that refinery output in China slowed for the fifth consecutive month in August alongside a decline in industrial output growth, retail sales, and new home prices.
Markets were also closely monitoring developments in the Middle East following recent explosions involving Hezbollah communications devices.
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Israeli security sources suggested that the Israeli spy agency Mossad was involved, raising fears of escalating tensions in the ongoing conflict in Gaza.
