Oil little changed before fed rate decision and inventory report

Oil was little changed before a key interest-rate decision by the Federal Reserve, following a two-day rally on easing concerns over banking crises in the U.S. and Europe.

West Texas Intermediate futures traded near $69/bbl after rising almost four per cent over the previous two sessions, as U.S. officials studied ways they might temporarily expand protection for all deposits. Both WTI and Brent were steady on Wednesday, with markets pricing in a roughly 80 per cent chance that the Federal Open Market Committee will hike interest rates by a quarter point.

WTI for May delivery was at $69.27/bbl at 7:48 a.m. in New York. Brent for May settlement dropped 0.5 per cent to $74.98/bbl.

Oil traders are also waiting to see government data on U.S. production and inventories.

The Energy Information Administration is set to release U.S. supply and demand data. On Tuesday, the American Petroleum Institute said U.S. crude inventories increased 3.26 million bbls last week, according to people familiar with the report.

“Financial market participants are closely watching the Fed meeting, the statement and guidance for the future, so that explains the lethargy today,” said Giovanni Staunovo, a commodities analyst at UBS Group AG.  “We still have the EIA report out later today, so I would be surprised if oil stays at the current level until the FOMC meeting.”

© 2023 Bloomberg L.P.

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