Oil prices stabilized on Wednesday after a two-day rally, as investors await the U.S. Federal Reserve’s expected interest rate cut and monitor potential disruptions in the Middle East. Brent crude futures for November dipped 3 cents to $73.67 a barrel, while U.S. crude futures for October slipped 11 cents, or 0.2%, to $71.08 a barrel as of 0053 GMT.
Both crude contracts saw gains of about $1 per barrel on Tuesday, driven by ongoing supply disruptions in the U.S. Gulf Coast following Hurricane Francine, which impacted output in the world’s largest oil-producing region. Traders are also betting that a U.S. Federal Reserve rate cut, the first in four years, could stimulate demand in the energy sector.
In addition to economic factors, geopolitical tensions in the Middle East have supported prices. A recent escalation, with Israel allegedly attacking Hezbollah militants in Lebanon using explosive-laden drones, has raised concerns about potential oil supply disruptions in the region.
“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.
With investors keeping a close watch on the Fed’s upcoming decision, global oil markets remain cautious, balancing between potential supply risks and economic stimulus that could drive future demand.
