Crude oil prices dive as investors weigh Fed rate decision, demand fears

NEW YORK — Oil prices fell on Wednesday as the US Federal Reserve held interest rate steady and demand concerns continue to weigh.

Brent crude futures for May settled down $1.43 or 1.64% at $85.95 a barrel. US West Texas Intermediate (WTI) futures for April delivery, which expire on Wednesday, ended $1.79 or 2.14% lower at $81.68.

The more active May WTI contract settled down $1.46 at $81.27 a barrel.

Brent had settled at its highest since Oct. 31 in the previous session at $87.38 a barrel, while WTI hit its highest since Oct. 27 at $83.47.

On Wednesday, the Federal Reserve kept interest rates in the 5.25% to 5.5% range, but policy makers indicated they still expect to reduce them by three-quarters of a percentage point by the end of 2024.

The Fed’s rate decision was within expectations and the impact on oil markets was limited, said Andrew Lipow, president of Lipow Oil Associates.

The US Energy Information Administration said crude oil stockpiles fell unexpectedly last week as exports rose and refiners continued to increase activity.

The draw in crude oil inventories was due to higher refinery runs and strong crude oil exports, said Matt Smith, lead oil analyst at Kpler.

The American Petroleum Institute also reported crude oil and gasoline stockpiles fell last week, while distillate inventories rose, according to sources.

Elsewhere, Ukrainian attacks on Russian refining assets have helped propel crude prices higher as market participants assessed the impact on crude and fuel supply balances.

“If these disruptions are prolonged, it could eventually force Russian producers to reduce supply if they are unable to export all of this crude oil,” ING analyst Warren Patterson said.

Russian Energy Minister Nikolai Shulginov said on Wednesday that the government and companies are in discussions about changes to the maintenance schedules at oil refineries in light of shutdowns at some sites, TASS news agency reported. —