Investing.com — Oil prices were little moved on Wednesday as traders stayed away from big bets while waiting for more clues on interest rates, while sector data on U.S. inventories offered mediocre guidance.
Crude oil prices traded largely within their range this week, having posted some gains the week before on the prospect of more U.S. sanctions on Russian oil supplies. But this momentum was not sustained due to renewed concerns about weakening demand in China and fears of a supply glut in the coming year.
Oil markets were also pressured by a firmer dollar, as traders continued to favor the greenback ahead of the close of a Federal Reserve meeting on Wednesday.
expiring in February, held steady at $73.74 per barrel, while rising to $70.30 per barrel at 9:06 ET (14:06 GMT).
U.S. Crude Oil Inventories Shrink, But Product Inventories Rise – API
Data from the US oil exchange showed on Tuesday evening that US oil inventories shrank by 4.7 million barrels in the week to December 13, more than expected for a decline of 1.9 million barrels.
But gasoline inventories rose by 2.4 million barrels, while distillates added 700,000 barrels.
The results showed that while overall supply in the U.S. tightened, fuel demand also likely cooled due to reduced travel during the winter season. This trend is expected to continue for at least the next two months.
Still, last week’s draw comes after two consecutive weeks of outsized builds. The API data also usually announces a similar reading of , due later on Wednesday.
The Fed was waiting for more interest rate signals
The emphasis this week was entirely on the , which will conclude later on Wednesday.
While the central bank is widely expected to cut rates by 25 basis points, traders are watching for signs that the Fed will implement a slower pace of cuts in coming months, especially as recent data shows persistent inflation, strong consumer spending and a robust labor market.
Expectations of such a scenario boosted the , which weighed on oil prices.
Relatively higher interest rates next year are also expected to weigh on economic growth, potentially dampening oil demand. But the resilience of the US economy can offset this trend.
Concerns about slowing demand continued to play a role after top importer China published a slew of mediocre economic data last week. Signals about more stimulus measures in the country were also largely absent.
(Ambar Warrick contributed to this article)
