WTI Crude Oil comes off 3-month high ahead of FOMC meeting outcome

Key points

Futures on US West Texas Intermediate Crude Oil came off recent three-month high, retreating almost 1% on Wednesday, amid caution ahead of the Federal Reserve’s policy decision later today and as US crude oil stocks rose.

WTI Futures have been surging over the past month on tightening supply due to OPEC+ cuts and optimistic demand prospects stemming from China’s pledges to spur economic recovery.

Market players seemed to have squared their positions ahead of the FOMC meeting outcome.

The Federal Reserve is largely expected to raise the federal funds target range by 25 basis points, as it concludes its two-day meeting.

“Today’s rate hike, if it occurs, is widely anticipated to be the last one before a long pause, yet Fed officials will be very wary of raising false hopes of calling a day on the unprecedented monetary tightening programme,” PVM analyst Tamas Varga was quoted as saying by Reuters.

Meanwhile, the latest data by the American Petroleum Institute showed crude oil inventories had increased by 1.319 million barrels during the week ending July 21st, after a 0.797 million barrel drop in the prior week. Analysts on average had expected a decrease by 1.969 million barrels.

The official government inventory data will be released later today.

As of 12:21 GMT on Wednesday WTI Crude Oil Futures for September delivery were losing 0.90% to trade at $78.91 per barrel.

At the same time, Brent Oil Futures for October delivery were losing 0.94% on the day to trade at $82.47 per barrel.