WTI oil weaker ahead of weekly supply report, Brent supported by OPEC talk

Today West Texas Intermediate oil futures were weaker, as investors were waiting for the release of weekly supply data out of the U.S. later in the session to gauge the strength of oil demand from the world’s largest consumer.

Wednesday’s government report was expected to show that U.S. crude oil stockpiles fell by 1.7 million barrels last week, while gasoline stockpiles were forecast to decrease by 0.3 million barrels. After markets closed on Tuesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories rose by 3.3 million barrels in the week ended September 12, compared to expectations for a decline of 1.5 million barrels. The report also showed that gasoline stockpiles decreased by 1.2 million barrels, while distillate stocks rose by 1.0 million barrels.

On the New York Mercantile Exchange, crude oil for delivery in November lost 33 cents, or 0.35%, to trade at $93.49 a barrel during European morning hours. Prices traded in a range between $93.44 and $93.88.

A day earlier, U.S. oil prices jumped $1.82, or 1.98%, to end at a two-week peak of $93.81 a barrel.

Market participants have prepared for the outcome of the Federal Reserve’s policy meeting later Wednesday, amid speculation the U.S. central bank could adopt more hawkish language.

The Fed was expected to cut its asset purchase program by another $10 billion, which would keep it on track for winding up the program in October, and to start raising interest rates sometime in mid-2015.

Investors will also pay close attention to a press conference with Fed Chair Janet Yellen shortly after the decision for further clues on the timing of the first U.S. rate hike since 2006.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for November delivery declined 31 cents, or 0.31%, to trade at $98.74 a barrel during the European morning session.

London-traded Brent prices rallied $1.17, or 1.17%, on Tuesday to settle at $99.05 amid reports that the Organization of the Petroleum Exporting Countries could trim its 2015 output target by 500,000 barrels per day in light of weakening global demand.

OPEC Secretary General Abdallah El-Badri said Tuesday that the organization could reduce production to 29.5 million barrels per day from 30 million when the group meets in November.

Oil prices have slipped in recent weeks on concerns about oil glut world-wide, while demand remains weak.