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  • WTI futures consolidate around $38.40 after Fed’s monetary policy decision.
  • Oil prices’ recovery from $34 lows has been halted at $39.30.
  • Concerns about global demand remain weighing on WTI prices.

Front-month WTI futures remain moving around $38.40 after Federal Reserve released its decision to keep the Fed Funds Rate and the target for assets purchases unchanged.

Crude prices fall after a three-day recovery

The price of the West Texas Intermediate barrel has dropped about $0.8 on Thursday, as the last three-days’ rally from multi-month lows below $34 was capped at $39.30. Oil prices remain on the defensive on concerns about the impact of the new COVID-19 restrictions over global demand.

The larger than expected decline on US Crude oil supplies reported by the Energy Information Administration (EIA) earlier today has failed to stem the downside trend on WTI prices.

Likewise, the monetary policy decision by the Federal Reserve has been practically ignored, with crude prices moving right above session lows around $38.40.

The Fed has acted as widely expected, maintaining its benchmark interest rate at the 0%-0.25% range and its bond-buying program unchanged while reaffirming their commitment to support US economy “promoting its maximum employment and price stability goals in times of the COVID-19 pandemic.

Fed Chair, Jerome Powell, confirmed at the press release that “the pace of improvement has moderated”, which has been assumed as a dovish sign. Although he observed that that economic activity continued to recover, he warned that the path ahead remains highly uncertain, which has triggered a slight negative pressure on an already weak USD.

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