Oil Prices Increase as U.S. Crude Inventories Drop; Investors Watch Fed’s Next Steps

Hey! Have You Heard The Buzz On Oil Prices?

By Georgina McCartney

Alright, listen up folks. Over in Houston, there’s been some pretty juicy movement in the oil market. Thanks to some ebb and flow in U.S. crude inventories and the Federal Reserve’s whisperings about interest rates, oil prices are feeling a little bit of a lift. Just like our favorite slice on a chilly Manhattan evening, things are heating up. We’re talkin’ Brent futures up 60 cents at a neat $73.79 a barrel, and U.S. West Texas wobbling up by 88 cents to a respectable $70.96.

The Inventory Jazz

In case you’re wondering what’s stirring this pot, there’s been a drop in U.S. crude and distillate stocks, even though gasoline managed to sneak up a bit for the week ending Dec. 13. Brought to you by the ever-watchful Energy Information Administration, because that’s how they roll. Demand seems to be catching some wind too–total product supplied hit 20.8 million bpd, which is about 662,000 bpd higher than what we saw last week.

Fed Talk and the Heartbeat of Wall Street

Meanwhile, the Fed—yeah, that one—has had us all on edge. They’re expected to slice rates by a quarter point. But here’s the kicker: everyone’s got an eye on what they’re plotting for 2025. StoneX’s Alex Hodes called it, saying investors are sniffing around for that forward-thinking vibe and its implications. Our city’s own Diane Swonk over at KPMG even threw a curveball with a “hawkish cut” prediction, pointing to a possible steady reduction train.

* **What’s in store?**
– The Fed’s wizardry is due at 2 p.m. ET.
– Chair Jerome Powell is gonna break it down right after.

The Market’s Temperature

Phil Flynn from Price Futures Group? He’s got a sunny outlook. Feels like we’ve turned the corner from the recent gloomy gusts. There’s a renewed sparkle of optimism about oil demand. But as always, there’s a catch. UBS’s Giovanni Staunovo chips in with a reminder that the real deal hinges on how aggressively the Fed slices rates next year. Until then, any further leap in oil prices might just sit tight.

Waiting on the Fed’s Green Light

Flynn’s foreseeing a hurdle with the Fed’s decision. If they manage their lane like everyone’s expecting, here’s the scoop: oil prices might just touch those new highs again before the month takes a bow. There you have it, straight from the city where dreams are paved in concrete and every move has a story behind it. Maybe oil’s on the rise for now, but hey, tomorrow’s another day. With all eyes on the Fed and the fluctuation game still at play, you never know what twist is waiting on Broadway or beyond.

*Reporting credits: Georgina McCartney in Houston, Arunima Kumar in Bengaluru, Colleen Howe in Beijing, Jeslyn Lerh in Singapore, edited by Chizu Nomiyama, Jonathan Oatis, Mark Potter, and David Gregorio.*

**References and Further Reading:**
– [Energy Information Administration](https://www.eia.gov)
– [Federal Reserve Bank](https://www.federalreserve.gov)

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