Brent and West Texas Intermediate (WTI) crude oil futures experienced a decline on Wednesday morning, even as a report revealed a drop in U.S. crude oil inventories. At 9:58 AM, February Brent oil futures were priced at $73.18, down by 0.01%, while January WTI crude oil futures stood at $69.66, reflecting a decrease of 0.60%.
U.S. Crude Oil Inventories Decline
The American Petroleum Institute (API) reported a reduction of 4.7 million barrels in U.S. crude oil inventories for the week ending December 13. This decline indicates tightening supplies. However, the report also showed that gasoline inventories increased by 2.9 million barrels over the same period.
The API’s data suggests a drop in gasoline demand, likely due to reduced travel during the winter season. This decline in consumption has weighed on market sentiment, contributing to the lower WTI prices.
Market Awaits EIA Data and Fed Meeting Outcome
Official data from the U.S. Energy Information Administration (EIA) is expected later in the day, which could provide further insights into inventory levels and market trends.
In addition, investors are closely watching the U.S. Federal Reserve’s meeting on Wednesday. The market is anticipating a 25 basis points interest rate cut, along with projections for rate cuts in 2025, which could impact broader economic conditions and, in turn, commodity markets.
Geopolitical Tensions Influence Market
The ongoing geopolitical situation also affected the oil market on Tuesday, when the European Union imposed its 15th package of sanctions against Russia. This new round of sanctions targets 33 additional vessels involved in transporting Russian crude oil and petroleum products. The UK also imposed sanctions on 20 ships, adding further pressure on Russian oil exports. As one of the world’s largest crude oil producers, Russia’s market movements are critical for global oil prices.
Other Commodity Movements
In other commodities, December natural gas futures traded higher at ₹284.20 on the Multi Commodity Exchange (MCX), marking an increase of 5.26% compared to the previous close of ₹270. Meanwhile, December guargum contracts on the National Commodities and Derivatives Exchange (NCDEX) traded at ₹9705, down by 0.76% from ₹9779. Similarly, December turmeric futures decreased by 0.98%, trading at ₹13,502 compared to the previous close of ₹13,636.
As the day progresses, traders will continue to monitor key market data, including EIA reports and Federal Reserve decisions, which could shape commodity price movements in the near future.
