In anticipation of the U.S. Federal Reserve‘s interest rate decision, oil prices continued to decline from their 10-month highs on Wednesday. Investors remained uncertain about the timing of peak interest rates and the subsequent impact it could have on energy demand.
Despite a larger-than-anticipated decrease in U.S. oil stockpiles and sluggish U.S. shale output, prices declined. These factors suggested a tight supply of crude oil for the remainder of 2023.
Read more: Saudi’s stellar growth stalls as oil sector contracts
Global benchmark Brent crude futures experienced a modest decline of slightly over $1, settling at $93.33 per barrel. They were down by 80 cents or 0.8 percent, reaching $93.54 per barrel. It’s worth noting that Brent had reached its highest level since November, hitting $95.96 per barrel on Tuesday.
U.S. West Texas Intermediate crude futures experienced a decrease of 0.8 percent, equivalent to a decline of 75 cents, reaching $90.45 per barrel. This followed a climb to a 10-month high of $93.74 per barrel the day before. As for the October WTI contract, it was set to expire on Wednesday, while the more actively traded November contract saw a decline of 70 cents, or 0.8 percent, settling at $89.78 per barrel.
Market participants are eagerly anticipating several central bank interest rate decisions scheduled for this week, including the U.S. Federal Reserve’s announcement on Wednesday. These decisions will play a crucial role in assessing the prospects for economic growth and fuel demand. While it is widely anticipated that the Federal Reserve will maintain interest rates at their current level, the primary focus will be on the future direction of their policy, which remains uncertain.
Crude oil inventories
According to market sources referencing figures from the American Petroleum Institute on Tuesday, U.S. crude oil inventories witnessed a decline of approximately 5.25 million barrels during the previous week.
U.S. oil production from the major shale-producing regions is projected to decrease and reach 9.393 million barrels per day (bpd) in October. This would mark the lowest level since May 2023. The decline comes in the wake of Saudi Arabia and Russia’s decision to extend their combined supply cuts of 1.3 million bpd until the end of this year.
Successful bid
Saudi Arabia is set to host the 25th World Petroleum Conference in 2026, following the signing of a memorandum of understanding (MoU) between Energy Minister Prince Abdulaziz Bin Salman and Pedro Miras, the president of the World Petroleum Council. The decision was made after Saudi Arabia’s bid was accepted by the organizing committee during the Youth Conference held in Kazakhstan last October.
The World Petroleum Conference is a significant global event that brings together countries and organizations to foster collaboration and address challenges in the energy sector. This prestigious conference will provide a platform for discussions and knowledge exchange in Riyadh, attracting experts and industry professionals from around the world.
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