Oil News: Crude Oil Futures Hold as Traders Eye Fed Cut and EIA Inventory Draw

Crude Firms as Traders Brace for EIA Draw and Fed Decision

Light crude futures (WTI) are edging higher on Wednesday as traders await the U.S. Energy Information Administration’s (EIA) inventory report at 15:30 GMT and the Federal Reserve’s rate decision at 19:00 GMT. After rejecting the 50-day moving average near $59.50 earlier this week, prices are holding near $58.44 — a key short-term retracement level — as bulls and bears await fresh direction.

At 11:36 GMT, Light Crude Oil Futures are trading $58.61, up $0.36 or +0.62%.

Crude Inventories Set for Hefty Drawdown

Macquarie and other strategists expect the Energy Information Administration (EIA) to report a 7.0 million barrel draw for the week ending December 5, reversing last week’s surprise 0.6 million barrel build.

API data released Tuesday showed a similar 4.78 million barrel draw in crude, but large builds in gasoline (+7 million barrels) and distillates (+1.03 million barrels) raised demand concerns.

Macquarie models lower imports (-0.6 million bpd), a modest export bump, and slightly higher refinery runs as key drivers behind the draw.

However, cargo timing remains a wild card, and product builds continue to outpace expectations. SEB analysts noted that broad product builds and slowing demand paint a picture of a market that’s still well-supplied heading into year-end. The EIA’s last report showed total petroleum stocks climbing 5.5 million barrels week over week and 58.5 million year over year.

Fed Cut Could Support Demand — But Supply Looms Large

Markets widely expect the Fed to cut its benchmark rate by 25 basis points this afternoon to support a cooling labor market. While a dovish Fed could help stimulate growth and boost oil demand over time, traders are cautious. ING analysts flagged that the physical market remains heavy, especially with U.S. output staying strong.

EIA Lifts 2025 Output Forecast, Sees Record Supply

The EIA this week raised its 2025 U.S. crude production forecast by 20,000 barrels per day to a record 13.61 million bpd. It slightly trimmed its 2026 forecast by 50,000 bpd to 13.53 million, but the broader trend still points toward persistent U.S. supply strength — a key bearish weight for prices, especially if demand fails to rebound as expected.

Peace Talks Could Unlock Russian Barrels

Separately, geopolitical watchers are eyeing Ukraine-Russia developments. President Zelenskiy said Ukraine and European partners are preparing updated documents to present to the U.S. for a potential peace plan. A deal could eventually lead to reduced sanctions on Russian companies, potentially freeing up restricted supply — another downside risk if the market moves deeper into surplus.

Short-Term Outlook: Bears Still Have the Edge

Crude is hovering near $58.44 heading into today’s double-header. A bullish inventory print or Fed surprise could push prices back toward $59.23 and the 50-day moving average at $59.50. But if today’s data doesn’t deliver, sellers may press toward the $57.10 low from November 25. More likely than not, supply risks and weak demand keep the near-term tone leaning bearish.

More Information in our Economic Calendar.