Oil prices experienced a decline of more than $1 on Wednesday ahead of the US Federal Reserve’s interest rate decision. Investors are uncertain about the timing of peak interest rates and the potential impact on energy demand.
The focus is on the Fed’s projected policy path, with expectations that it will keep interest rates unchanged but with uncertainty surrounding its outlook for economic growth and fuel demand.
Despite a decrease in US crude oil stockpiles of approximately 5.25 million barrels last week, prices fell. This decline was larger than the 2.2 million-barrel decline anticipated by analysts in a Reuters poll.
Analysts from Goldman Sachs raised their 12-month Brent forecast from $93 a barrel to $100 a barrel, citing lower OPEC supply and higher demand offsetting increased U.S. supply.
In addition to Fed decisions, data from the UK showed an unexpected drop in inflation in August, potentially affecting the Bank of England’s interest rate decisions.
Brent crude futures dropped by $1.46 to $92.88 a barrel, while U.S. West Texas Intermediate crude futures fell by $1.30 to $89.90 a barrel.