Fed Cut A Bust, Oil Declines As Traders Contemplate A Soft U.S. Economy

Meanwhile, Trump aims to nullify Russia by further lowering energy costs: File Image/Pixabay

Although a U.S. Federal Reserve rate cut was  highly anticipated and widely predicted to support oil trading, it proved to be no match for concerns about the U.S. economy – and as a result, prices on Thursday continued their downward trajectory.

Brent settled down 51 cents at $67.44 per barrel, and West Texas Intermediate settled down 48 cents at $63.57.

The Fed's minuscule rate cut in response to a sliding labour market was widely viewed as disappointing and ineffective (critics believed a 50 basis point cut was warranted); but far more troubling were negative perceptions of the economic climate that prompted the cut, with many pundits citing a 2.5 year low in U.S. housing starts that could remain an economic headwind for the rest of 2025.

Meanwhile, U.S. president Donald Trump during a press conference with the prime minister of the United Kingdom told media that he expects further reductions in energy costs and that this will weaken Russia's positions on the international stage and ultimately force the Kremlin to end its war with Ukraine.

He said, "Putin will stop killing people if you get energy down another $10 a barrel; he's going to have no choice because his economy stinks."

However, he also criticised European countries for continuing to buy Russian oil, stating it harmed the interests of the U.S.

As Trump made his case against Russia, Ukraine launched more drone attacks that hit two refineries including Gazprom's giant Neftekhim Salavat complex in Bashkortostan; it was one of Kyiv's deepest penetrations into Russian industrial infrastructure since the war began.

Still, trade data published on Thursday showed that Russia's seaborne oil product exports jumped 8.9 percent in August compared with July, rising to 9.44 million metric tons.

In other oil news on Thursday, ExxonMobile stated that it is not concerned with "chasing the narrative of the week" and will pursue fossil fuel growth through 2050; CEO Dan Ammann defended this strategy by pointing out, "We saw some oil and gas companies, five, six, seven years ago say they were going to reduce production 40 percent by 2030; there was literally no math you could do to suggest that was a good idea."

Despite the hype for alternative energy, Exxon sees oil and gas holding steady at 55 percent of the global energy mix by 2050.