As US rate cut hopes fade, oil ends lower and posts weekly decline.

On Friday, oil prices dropped by almost 3%, resulting in a weekly decline, following a U.S. central bank official's statement that interest rate cuts may not occur until at least two more months.

Brent crude futures decreased by 2.5% to $81.62 a barrel, while U.S. West Texas Intermediate crude futures (WTI) fell by 2.7% to $76.49.

Despite declining about 2% and WTI falling more than 3%, fuel demand and supply concerns could potentially boost prices in the near future.

Fed Governor Christopher Waller advised that Federal Reserve policymakers should postpone U.S. interest rate cuts by at least two more months, which could potentially hinder economic growth and reduce oil demand.

Since last July, the Fed has maintained its policy rate within the range of 5.25% to 5.5%. The minutes of its recent meeting reveal that most central bankers expressed concern about hastily relaxing policy.

If inflation returns, it will decrease demand for energy products, causing the entire energy complex to react, according to economist Tim Snyder of Matador Economics.

He stated that the market is not ready to absorb that at the moment, particularly while it is still trying to determine its course.

Despite the impact of high interest rates, some analysts argue that demand has remained robust in the United States.

JPMorgan's analysts reported that oil demand is increasing by 1.7 million barrels per day (bpd) every month, as indicated by their demand indicators, through February 21st.

The analysts stated that the current increase in production is comparable to the 1.6 million bpd rise seen in the previous week, which may be attributed to the increased travel demand in China and Europe.

The most serious push in weeks to halt the conflict in Palestine and see Israeli and foreign hostages released is currently underway in Paris with Gaza truce talks.

An easing of geopolitical tensions may be anticipated by the market as a result of ceasefire talks, according to Tim Evans, an independent oil market analyst, in a note.

On Thursday, more shipping vessels were forced to divert from the Red Sea trade route due to attacks by Iran-backed Houthi militants near Yemen.

Since November, the most oil rigs have been added by U.S. energy firms this week, according to energy services firm Baker Hughes (BKR.O).

The number of oil rigs increased by six to 503 this week and also rose by four this month.