Oil dips from several months’ high ahead of US Fed’s decision

Oil prices fell on Wednesday after hitting their highest levels in several months during the previous session, as investors awaited the decision of the Federal Reserve (the US central bank) later on Wednesday regarding monetary policy.

According to Reuters, by 1201 GMT, Brent crude futures for May delivery fell 72 cents, or 0.82 percent, to $86.66 per barrel. US West Texas Intermediate crude futures for April delivery, which expire upon settlement on Wednesday, fell 84 cents, or 1.01%, to $82.63 a barrel.

The most active futures contracts for US West Texas Intermediate crude for May delivery fell 78 cents, or 0.94%, to $81.95 a barrel.

In the previous session, the two crude oils recorded their highest levels since late October at settlement, as Brent crude reached $87.38 per barrel, while West Texas Intermediate crude reached $83.47 per barrel.

Prices jumped as traders assessed the impact of Ukraine’s recent attacks on Russian refineries on global oil supplies.

Traders are awaiting an announcement from the Federal Reserve (the US central bank) regarding the interest rate later on Wednesday, seeking indications on the interest rate path for the rest of the year.

The Council is not expected to reduce borrowing costs, but the new economic forecasts could indicate smaller interest rate cuts and the start of monetary easing sooner than expected.

The dollar rose for the fifth session in a row after the release of data indicating the strength of the US economy, which affected the morale of Asian buyers. A stronger dollar makes oil more expensive for holders of other currencies, weakening demand.

Markets are also awaiting official US inventory data from the US Energy Information Administration at 1430 GMT on Wednesday.