Oil prices edged lower on Wednesday after climbing more than 1% in the previous session, as traders weighed geopolitical risks against expectations of U.S. monetary policy easing.
Brent crude futures fell 8 cents, or 0.1%, to $68.39 a barrel at 7:30 a.m. WAT, while U.S. West Texas Intermediate (WTI) crude dropped 6 cents, or 0.1%, to $64.46.
The benchmarks had settled higher on Tuesday amid growing concerns that Russian supplies could be disrupted. According to Reuters, three industry sources said Russia’s state pipeline operator, Transneft, warned producers they might be forced to cut output following Ukrainian drone strikes on export terminals and refineries.
Attention is now on the U.S. Federal Reserve, which concludes its September 16–17 policy meeting on Wednesday. A 25-basis-point interest rate cut is widely anticipated, a move that could stimulate economic activity and support fuel demand. The meeting also comes as new governor Stephen Miran formerly with the Trump administration joins deliberations, while President Donald Trump continues efforts to remove board member Lisa Cook.
Meanwhile, fresh data pointed to tighter supplies in the United States. Figures from the American Petroleum Institute showed crude inventories fell by 3.42 million barrels last week, while gasoline stocks dropped by 691,000 barrels. Distillate inventories, however, rose by 1.91 million barrels in the week ending September 12.