At 09:45 GMT, Light Crude Oil Futures are trading $64.12, down $0.40 or -0.62%.
Ongoing Ukraine-Russia tensions help limit downside
While price action has cooled, geopolitical tensions continue to underpin the market. Recent Ukrainian drone strikes on Russian energy infrastructure have raised concerns about potential supply disruptions. Russia’s Transneft reportedly warned producers that output cuts may be required if export facilities remain compromised.
Analysts suggest that if the drone-related damage proves temporary, oil may return to a $5-per-barrel trading range. However, for now, the risk of further disruptions has introduced a bullish risk premium, helping limit downside pressure on prices.
Traders eye Federal Reserve policy for demand signals
The crude market is also closely watching the Federal Reserve’s policy decision expected later today. Markets are pricing in a 25-basis-point rate cut, which could lower borrowing costs and potentially boost fuel demand in the coming months.
Phillip Nova analyst Priyanka Sachdeva highlighted that the rate cut, along with geopolitical risk and tight distillate inventories, has supported recent price strength. However, she cautioned that OPEC+ output increases and persistent global supply concerns could keep a lid on sustained rallies.
API data shows mixed stockpile picture; EIA data next
On the supply side, preliminary American Petroleum Institute (API) data showed a decline in U.S. crude and gasoline inventories, but a rise in distillate stocks. The official Energy Information Administration (EIA) data due later today will offer clearer insight. According to a Reuters poll, analysts expect a crude draw alongside builds in gasoline and distillate supplies. However, a consensus of analysts polled by Dow Jones predict a 1.4 million barrel build.
