09:15 AM EST, 12/19/2024 (MT Newswires) -- Oil moved higher early on Thursday after the dollar edged down from a two-year high that came after the Federal Reserve made its third-straight cut to interest rates while indicating it is likely to slow the pace of cuts in the new year.

West Texas Intermediate crude for January delivery was last seen up US$0.46 to US$71.04 per barrel, while February Brent oil was up $0.28 to US$73.67.

The dollar rose to the highest since November, 2022, on Wednesday after the Federal Reserve, as expected, cut interest rates by 25 basis points but indicated it is likely to only cut rates by 50 basis points in 2024 as the incoming Trump Administration promises to impose inflationary tariffs on imports into the United States.

"Once again, the macro suite ran as the great interferer as the FOMC decision, which came as no surprise at -0.25%, was accompanied with realised fear of a future conservative interest rate path. Inflation seemed to be in the mind of the Fed Chair Jerome Powell as he warned, "we have been moving sideways on 12-month inflation." While he was not prepared to comment on what a Trump administration would mean for markets, the much vaunted 'dot plot' now only allows for 50-basis point cuts in 2025, which is half of market expectations," PVM Oil Associates noted.

The dollar edged off Wednesday's high early, with the ICE dollar index last seen down 0.08 points to 107.95. A high dollar is bearish for commodities priced in the currency.