Oil Prices Steady Ahead of Key Fed Decision

Oil prices remained largely unchanged on Wednesday as investors cautiously awaited the U.S. Federal Reserve's anticipated interest rate cut. Brent futures saw a slight increase of 12 cents, or 0.16%, to $73.31 per barrel, while U.S. West Texas Intermediate crude rose by 11 cents, or 0.16%, to $70.19 per barrel.

Impact of Fed's Rate Movements on Oil Market

The Fed is widely expected to cut interest rates for the third time since its policy easing cycle began. However, analysts are more focused on any indications regarding interest rate movements in 2025, which could significantly impact the oil market.

Investor Caution Amid Political Uncertainty

"Projections for rate cuts in 2025 are being reassessed, especially with Trump's planned return on January 20. There is a prevailing narrative that Trump's policies may lead to inflation, which, coupled with concerns about potential interference with the Federal Reserve's autonomy, is causing oil investors to remain cautious," explained Priyanka Sachdeva, a senior market analyst with Phillip Nova.

Sanctions and U.S. Stock Data Impact

The European Union adopted a 15th package of sanctions against Russia, targeting additional vessels from Russia's shadow fleet used for transporting crude or petroleum products. Meanwhile, the U.S. saw crude stocks fall by 4.69 million barrels in the week ended December 13, according to the American Petroleum Institute. The U.S. Energy Information Administration will release its oil storage data on Wednesday.