Oil slides amidst US Fed rates cut, hurricane threat

Oil slid in the global commodities market during early trading hours on Friday amidst U.S Fed rates cut, and supply threat from Hurricane. China crude oil imports still remain unimpressive even with the Beijing stimulus while OPEC+ stayed action on output hike.

Brent fell to $74.76 per barrel while the US benchmark West Texas Intermediate dropped to $71.27 per barrel. Hurricane Rafael struck Cuba with heavy rain and strong winds, causing damage to the country’s electricity grid and leading to power outages.

Hurricane Rafael marks the fifth major storm of the year in the Atlantic. Authorities announced Thursday that the hurricane reduced its intensity to ‘Category 2’ and was heading towards the Gulf of Mexico.

Experts predict that the storm, which has eased in intensity and reached the Gulf of Mexico after passing Cuba, will move towards the west of the Gulf throughout the weekend.

While experts were worried that the hurricane would hit the US coast when it first formed, they said the threat to oil production facilities on the US coast has decreased after the storm’s projected route changed.

The hurricane, which is gradually weakening, is expected to bypass the US coast. In the coastal states where large US oil facilities are located, production was disrupted in recent months due to the effects of hurricanes Francine and Ian.

Meanwhile, as the election uncertainty in the US ended with the victory of Republican candidate Donald Trump, investors focused on the Fed’s interest rate decision.

The Fed reduced interest rates Thursday by 25 basis points to the range of between 4.5% and 4.75%, in line with expectations. Fed Chair Jerome Powell said at a news conference after the decision that the US elections would have no effects on the Fed’s policy decisions in the near term.