HG MARKETS:

Following two sessions of gains, oil prices dipped on Wednesday as an industrial survey revealed increased U.S. fuel and crude stocks, counteracting growing Middle East tension and the possibly positive effects of a U.S. interest rate cut on crude oil prices. The week ended on September 13 saw a 1.96 million barrel increase in U.S. crude stocks, according to market sources on Tuesday that cited data from the American Petroleum Institute. November Brent crude futures were trading at $73.16 a barrel, down 54 cents, or 0.7%. October U.S. oil futures fell 46 cents, or 0.7%, to $70.73.

Crude fell as a result of ongoing tensions in the Middle East being somewhat offset by a weekly increase in U.S. crude and fuel storage, as reported by the API. On September 10 Brent has recovered its loses after falling below $70 to its lowest in December 2021. Weak global refinery margins, particularly from China and the US, which indicate weak demand, are putting resistance on oil to move above $75 price. Today,With markets pricing a 2/3 chance of a 50 basis point cut, the Federal Reserve is anticipated to make its first interest rate cut in over four years .

The possibility that escalating hostilities in the Middle East would impair oil supplies provided some solace to oil market, since Israel is reported to have targeted Hezbollah, a militant organization, in Lebanon, allegedly using explosive-laden pagers, killing eight people. Hezbollah vowed to exact revenge on Israel. Similarly, the most recent batch of official U.S. inventory data from the government’s Energy Information Administration is scheduled to be released at 7:30 PM tonight, after Tuesday’s API report.

According to Reuters polling of analysts, crude inventories decreased by roughly 500,000 barrels on average, while distillate and gasoline stocks marginally climbed.