Brent crude futures settled 68 cents, or 0.83%, higher at $82.60 a barrel, with U.S. WTI crude futures up 60 cents, or 0.77%, to $78.50
Oil settled higher on Wednesday as ongoing tensions in the Middle East lent support to prices, but news that interest rate cuts could start as late as December capped gains, following the Fed’s statement concluding its two-day meeting.
Brent crude futures settled 68 cents, or 0.83%, higher at $82.60 a barrel, with U.S. WTI crude futures up 60 cents, or 0.77%, to $78.50.
Prices had dropped more than 2% last week after OPEC and its allies said they would phase out output cuts starting from October.
Meanwhile, investors were left disappointed after the Fed pushed out the start of rate cuts to possibly as late as December, with officials projecting only a single quarter-percentage-point cut for the year amid rising estimates for what it will take to keep inflation in check.
U.S. consumer price data, published on Wednesday, had reinforced expectations of a Fed rate cut in September.
It will be interesting to see what Powell says, I do not think there is any doubt that they will leave rates where they are, according to Ben McMillan, a fund manager for IDX Advisors.
Higher borrowing costs tend to dampen economic growth, and could, by extension, restrict oil demand.
The market is holding its breath right now, according to Tim Snyder, economist at Matador Economics.
If Powell talks outside of what the Fed publishes, there could be a little discord within the policy committee as to their direction on interest rates, he said.
U.S. crude stocks posted a surprise build last week, up by 3.7 million barrels to 459.7 million barrels, compared with expectations of a 1 million barrel-draw, the Energy Information Administration (EIA) stated on Wednesday.
