Oil drops over profit-taking ahead of Fed monetary policy decision

Oil prices declined on Wednesday as investors profited from 10-month price highs due to uncertainties ahead of the much-anticipated US Federal Reserve (Fed) meeting later on Wednesday, although bearish oil demand data capped further price downturns.

International benchmark crude Brent traded at $93.48 per barrel at 09.57 a.m. local time (0657 GMT), a 0.91% loss from the closing price of $94.34 a barrel in the previous trading session on Tuesday.

The American benchmark West Texas Intermediate (WTI) traded at the same time at $89.64 per barrel, down 0.93% from the previous session's close of $90.48 per barrel.

Brent reached its highest level since last November, hovering around $95 a barrel on supply concerns after Saudi Arabia and Russia extended curbs until the end of the year.

However, prices dipped on Wednesday as investors sought to profit from the high price of oil before the Fed announced its next monetary policy decision.

Although investors anticipate that the Fed will keep interest rates unchanged for this month, they will be watching Fed officials closely for any indications of the direction the bank will take moving forward.

However, bullish demand signs in the US limited further price declines following the American Petroleum Institute’s announcement late Tuesday of an estimated fall of 5.25 million barrels in US crude oil inventories, against the market expectation of a 2.66 million-barrel draw.

The US Energy Information Administration's (EIA) data on oil stocks will be announced later on Wednesday, and if the stock decline is confirmed to be larger than estimates, prices could fall further. ​​​​​​