Oil prices settle lower, US economic concerns outweigh Fed rate cut

Core Insights - Oil prices declined as traders expressed concerns over the U.S. economic outlook following the Federal Reserve's interest rate cut [1][2] - The Fed's decision to lower rates is aimed at stimulating growth amid signs of a weakening job market [2] - U.S. crude oil stockpiles decreased significantly, while distillate stockpiles rose unexpectedly, raising demand concerns [3][4] Economic Indicators - Brent crude futures fell by 51 cents (0.8%) to $67.44, while U.S. West Texas Intermediate (WTI) crude dropped by 48 cents (0.8%) to $63.57 [1] - The Fed cut its policy rate by 0.25 percentage points, indicating a trend of lower borrowing costs for the remainder of the year [2] - New applications for unemployment benefits decreased, but the overall labor market remains soft [2] Housing Market Impact - Single-family home building in the U.S. reached a near 2.5-year low in August due to an oversupply of unsold new houses, potentially hindering economic recovery [3] Supply and Demand Dynamics - U.S. crude oil stockpiles fell sharply, with net imports hitting a record low and exports rising to a near two-year high [3] - A rise in U.S. distillate stockpiles by 4 million barrels against expectations of a 1 million barrel increase raised demand concerns [4] - Kuwait's oil minister anticipates an increase in oil demand, particularly from Asian markets, following the U.S. interest rate cut [6] Geopolitical Factors - Ukraine's drone strikes on Russian oil facilities are part of efforts to disrupt Russia's oil sector, which could support higher prices if Russian oil is kept off the market [5] - Russia's Finance Ministry is implementing measures to protect its budget from oil price fluctuations and Western sanctions [4]