Analyst Rystad Energy said Wednesday's Federal Reserve rate cut is unlikely to move oil markets, with supply and demand fundamentals continuing to dominate price direction.
The Fed lowered its benchmark lending rate by 25 basis points to a range of 3.50%-3.75%, a move widely anticipated by markets. Rystad said the central bank's divided decision reflects cautious easing while signaling a potential pause, indicating monetary policy is no longer a dominant driver of commodity prices.
Rystad said the cut may modestly loosen financial conditions and could slightly weaken the U.S. dollar, which is typically supportive for crude, but the Fed's signal that it may hold off on additional cuts tempers any potential boost, suggesting the central bank is buying time rather than starting a sustained easing cycle.
For the oil market, Rystad said fundamentals remain the anchor. The firm pointed to continued supply growth and a large supply-demand surplus, which outweigh any impact from a single quarter-point move.
Rystad said the Fed's decision provides only a mild macro tailwind and doesn't change the medium-term outlook for commodities, which are expected to respond more to fundamentals and geopolitics than to the central bank's tentative policy path.
This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.
Reporting by Allegra Fradkin, afradkin@opisnet.com; Editing by Michael Kelly, mkelly@opisnet.com
(END) Dow Jones Newswires
December 11, 2025 12:34 ET (17:34 GMT)
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