Oil edged up on Wednesday after a drop in U.S. crude inventories, and as investors eyed a potential interest rate cut by the U.S. Federal Reserve while weighing its projections for 2025.
Brent futures were up 62 cents, or 0.85%, to $73.81 a barrel at 10:40 a.m. ET, while U.S. West Texas Intermediate crude was up 86 cents, or 1.23%, to $70.94.
U.S. crude stocks and distillate inventories fell while gasoline inventories rose in the week ending Dec. 13, the Energy Information Administration (EIA) said on Wednesday.
Crude inventories fell by 934,000 barrels to 421 million barrels in the week, compared with analysts' expectations in a Reuters poll for a 1.6-million-barrel draw.
Crude futures edged higher after the data.
Meanwhile, the Fed is expected to cut rates by a quarter point, but to signal a cautious approach to loosening monetary policy next year.
"Trade war fears and uncertainty on how aggressively the U.S. Fed will cut interest rates next year is likely capping the upside for now," UBS analyst Giovanni Staunovo said.
The U.S. central bank will release its policy statement at 2 p.m. ET (1900 GMT), followed by remarks from Chair Jerome Powell.
"A quarter-point cut itself is unlikely to shake markets much. Investors may focus more on hints and clues on how likely a January pause is, as well as on how many rate cuts policymakers are contemplating throughout 2025," said Charalampos Pissouros, senior investment analyst at brokerage XM.
Lower rates decrease borrowing costs, which can boost economic growth and demand for oil.
Investors are more focused on the central bank rate decision than U.S. crude stock data, said John Evans, analyst with oil broker PVM.