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Oil prices fell in today's Asian trade, pulling back from 10-month highs reached yesterday. Markets are awaiting the US Federal Reserve's interest rate decision, as well as signals when rates will peak and what impact this will have on energy demand, BTA reported, citing Reuters.
Brent futures from the North Sea, a reference for the European market, lost 80 cents, or 0.8 percent, to $93.54 a barrel. Brent traded at $95.96 a barrel yesterday, its highest price since November 2022.
U.S. light crude struck 75 cents to $90.45 a barrel after rising to a 10-month high of $93.74 a barrel on Monday.
"Oil price hikes take a small break as every trader expects a key decision from the Fed that could tip the scales whether the U.S. economy will have a soft or hard landing," said Edward Moya, senior market analyst at Oanda Corporation.
Moya added that the oil market is still "very tight" and will remain so in the short term.
Brent oil price hits 15-month high
Meanwhile, market sources citing data from the American Petroleum Institute reported that U.S. crude inventories fell by about 5.25 million barrels last week. Analysts polled by Reuters had predicted a drop of 2.2 million barrels.
"A large drop in U.S. oil inventories and slow shale production in the country have contributed to supply concerns coming from extended production cuts by Saudi Arabia and Russia," said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities.
"There will be some short-term adjustments in oil prices due to the recent surge, but expectations that both Brent crude and U.S. light crude will reach $100 a barrel later in the year will remain unchanged."
In addition, the Russian government is considering imposing export duties on all types of petroleum products from October 1 to June 2024. The new tariffs would be $250 per metric ton much higher than currently established and would aim to reduce fuel shortages, sources familiar with the matter told Reuters.