Oil prices fall, Brent below $73/barrel

Oil drilling rigs

Oil prices deepened their losses on Thursday, driven by concerns that high borrowing costs could reduce demand in the world's largest economy, after the Federal Reserve announced its intention to slow the pace of monetary easing in 2025.

Brent crude futures for February 2025 delivery dropped 0.70%, or $0.51, to settle Thursday at $72.88 a barrel.

Similarly, futures prices for US West Texas Intermediate (WTI) crude for January 2025 delivery fell 0.95%, or $0.67, to $69.91.

Brent crude prices are poised to average $73 per barrel in 2025, with the possibility to fall below $70, due to excess supply that would reach 1.2 million barrels per day (bpd), said JPMorgan Chase & Co.’s analysts in a recent note.

This came after the Federal Open Market Committee's report predicted only two interest rate cuts of 25 basis points (bps) each in 2025, compared to September estimates, which suggested four cuts totaling 100 bps or 1%.

On Wednesday, the Fed slashed the interest rates by 25 bps, marking the third cut this year.