NEW YORK: Oil prices eased on Wednesday after data showed an increase in U.S. diesel stockpiles, stoking worries about demand, as investors awaited the U.S. Federal Reserve’s decision on interest rates.
Brent crude futures lost 44 cents, or 0.64%, to $68.03 a barrel by 11:29 a.m. EDT (1529 GMT) while U.S. West Texas Intermediate crude futures were also down 44 cents, or 0.68%, at $64.08.
U.S. crude inventories fell sharply last week with a jump in exports and a sharp decline in imports, the Energy Information Administration said on Wednesday. However, a rise in distillate stockpiles stoked demand concerns and kept a lid on prices, analysts said.
“Looks like markets are responding on diesel, which is the soft underbelly of the entire complex,” said Phil Flynn, a senior analyst at Price Futures Group.
Investors were also awaiting the outcome of the U.S. Federal Reserve’s September 16–17 meeting. The Fed is expected to cut interest rates by a quarter of a percentage point later on Wednesday.
Russian oil supply risks were also in focus after Ukraine’s attacks on Russia’s energy infrastructure intensified in recent weeks.
Russia’s oil pipeline monopoly Transneft warned producers they might have to cut output after Ukraine’s drone attacks on critical export ports and refineries, three industry sources told Reuters on Tuesday.
On the supply side, Kazakhstan resumed oil supplies through the Baku-Tbilisi-Ceyhan pipeline on September 13, state energy company Kazmunaygaz said on Wednesday. Supplies were suspended last month because of contamination issues.
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