The energy sector selloff has intensified after the Federal Reserve delivered a harsh reality check last week, dashing hopes for a deep cut in interest rates. Last Wednesday, the central bank delivered a 25 basis point rate cut, as widely expected, but warned about higher inflation and fewer rate cuts in 2025. Fed Chair Jerome Powell went on to cite inflation as one of the primary reasons for forecasting a slower pace of interest rate cuts. Oil and gas stocks have collectively declined nearly 15% over the past month as energy markets struggle to find direction. Over the past couple of weeks, oil prices have struggled to break out of $68-$72 per barrel range for WTI, and $71-$75 a barrel for Brent.
“It feels as if oil prices must break out of their current, tightish, range. But it also feels as if they need a catalyst for this to happen,” David Morrison, senior market analyst at Trade Nation said.
