Oil futures fell sharply on Wednesday as investors awaited the OPEC+ decision on production cuts, with Brent crude dropping $1.31 (1.78%) to $72.31 per barrel and WTI crude declining $1.40 (2%) to $68.54. This followed Tuesday’s gains, where Brent rose 2.5%. OPEC+ is expected to extend output cuts until the end of Q1 2025, with the meeting’s rhetoric likely to heavily influence market direction, analysts said.
U.S. crude inventories fell more than expected last week, while gasoline and distillate stockpiles rose significantly as refiners ramped up operations, according to the EIA. Despite bullish momentum from the inventory draw, prices remained under pressure.
Geopolitical tensions added some support to prices. Israel threatened deeper attacks into Lebanon if its ceasefire with Hezbollah collapses. Additionally, South Korea’s brief declaration of martial law followed by a political crisis and escalations in Syria raised concerns over potential supply disruptions.