Oil prices experienced a slight decline on Wednesday, following a 1% increase in the previous session. As of 7:30 AM WAT, Brent crude futures decreased by 8 cents, or 0.1%, to $68.39 a barrel, while U.S. West Texas Intermediate crude futures fell by 6 cents, or 0.1%, to $64.46 a barrel. This downturn comes after the benchmarks settled more than 1% higher in the last trading session due to concerns over potential disruptions to Russian supplies.
According to Reuters, three industry sources reported that Russia’s oil pipeline monopoly, Transneft, has warned producers of possible output cuts following Ukraine’s drone attacks on critical export ports and refineries. The impact of these attacks on global oil supply is being closely monitored by investors. Additionally, market participants are awaiting the outcome of the Federal Reserve’s meeting on September 16-17, where a new governor, Stephen Miran, will join the deliberations.
The central bank is widely expected to cut interest rates by 25 basis points, which could stimulate the economy and boost fuel demand. Recent data showed that U.S. crude and gasoline stocks fell last week, while distillate stocks rose, according to market sources citing American Petroleum Institute figures. Specifically, crude stocks fell by 3.42 million barrels, and gasoline inventories decreased by 691,000 barrels in the week ending September 12, while distillate inventories rose by 1.91 million barrels from the prior week.
The market will be watching to see whether data from the U.S. Energy Information Administration on Wednesday matches these figures. A Reuters poll showed that analysts estimated crude inventories fell by about 900,000 barrels last week, distillate stockpiles rose by about 1 million barrels, and gasoline stockpiles rose by about 100,000 barrels. As the global energy landscape continues to evolve, investors will be closely monitoring these developments to gauge their impact on the oil market. The slight decline in oil prices on Wednesday underscores the ongoing volatility in the market, highlighting the need for continued attention to global events and their potential effects on energy supply and demand.
