Oil prices declined on Wednesday, bringing a halt to a strong rally that saw Crude rise to a 10-month high. Brent crude prices fell 0.8% from the previous session to $93.50 per barrel.
While oil appeared to be destined for a return to the $100 per barrel mark following output cuts by OPEC+ linchpins Saudi Arabia and Russia, the anticipation of the Federal Reserve’s interest rate decision later on Wednesday as well as industry technicals has beaten prices down.
“The impressive run-up in crude oil prices had to come to a temporary halt and today’s Fed decision on interest rates provides the perfect excuse to bank some money,” PVM Oil Associates Ltd. analyst Tamas Varga noted.
U.S. inventory levels appear to be in a precarious state, with the industry-funded American Petroleum Institute confirming that U.S. inventories declined by 5.25 million barrels last week. While a significant decline at the Cushing hub was noted, a separate assessment from AlphaBBL Corp. found a significant drop at the Oklahoma storage site as well. Official data is expected to be released by the end of Wednesday.