Oil prices traded in a narrow range early Wednesday as investors remained cautious ahead of an expected interest rate cut by the U.S. Federal Reserve.
Brent crude rose 12 cents, or 0.16 percent, to $73.31 a barrel by 0134 GMT, while U.S. West Texas Intermediate crude rose 11 cents, or 0.16 percent, to $70.19. the barrel.
The Fed on Wednesday is widely expected to cut interest rates for the third time since its policy easing cycle began.
Analysts believe that comments on the development of interest rates in 2025 will be more important for the oil market.
“Forecasts for rate cuts in 2025 are in question, especially given that Mr. Trump plans to return to the spotlight on January 20. There is a dominant narrative that “Trump’s policies could lead to inflation, which, coupled with concerns about potential interference with the autonomy of the Federal Reserve, is causing oil investors to remain cautious,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.
Lower rates reduce borrowing costs, which can boost economic growth and demand for oil.
The European Union on Tuesday adopted a 15th package of sanctions against Russia over its invasion of Ukraine, adding 33 more ships to Russia’s shadow fleet used to transport crude oil or petroleum products. Britain also sanctioned 20 ships carrying illicit Russian oil.
These new sanctions could increase the volatility of oil prices, although they have not yet succeeded in excluding Russia from the global oil trade.
In the United States, data from the American Petroleum Institute showed Tuesday that crude inventories fell by 4.69 million barrels in the week ended Dec. 13, according to a source. Gasoline inventories increased by 2.45 million barrels and distillate inventories increased by 744,000 barrels, according to the source.
Analysts expect U.S. energy companies to destock about 1.6 million barrels of crude in the week ended Dec. 13, according to a Reuters poll on Tuesday.
The U.S. Energy Information Administration will release its oil inventory data on Wednesday.
