TOKYO- Oil prices steadied on Wednesday, after rising in the previous two sessions, as investors await the US Federal Reserve’s anticipated interest rate cut, with the potential for more violence in the Middle East supporting the market.
Brent crude futures for November dropped 3 cents to $73.67 a barrel. US crude futures for October slid 11 cents, or 0.2 percent , to $71.08 a barrel.
Both contracts gained by about $1 a barrel on Tuesday on lingering supply disruptions in the US the world’s biggest oil producer, after Hurricane Francine and as traders bet that demand may increase following what would be the Fed’s first interest rate cuts in four years.
Prices were also supported by the potential for more violence in the Middle East that may cause possible output disruptions in the key producing region after Israel allegedly attacked militant group Hezbollah with explosive-laden pagers in Lebanon.
“Markets have calmed down as concerns over hurricane damage and escalating tensions in the Middle East have been factored in,” said Mitsuru Muraishi, an analyst at Fujitomi Securities.
“Now, investors are focusing on the Fed’s rate cuts which could revitalize US fuel demand and weaken the dollar,” he said, predicting that oil prices are likely to maintain a bullish tone after Brent hit its lowest since 2021 last week.
Traders kept bets the Fed will start an expected series of interest rate cuts with a half-percentage-point move downward on Wednesday, an expectation that may itself put pressure on central bankers to deliver just that.
