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Investing.com -- Oil prices slipped lower Wednesday, consolidating after recent strong gains on heightened concerns over disruptions in Russian production, with focus now squarely on the conclusion of a U.S. Federal Reserve policy meeting.
At 06:15 ET (10:15 GMT), Brent oil futures for November fell 0.7% to $68.02 a barrel and West Texas Intermediate crude futures fell 0.7% to $64.09 a barrel.
Oil buoyed by fears of Russian supply disruptions
Crude prices were perched at two-week highs as Russia and Ukraine launched a series of debilitating strikes against each other. Kyiv was seen targeting Moscow’s energy infrastructure, with Reuters reporting that Russian producers may have to cut output due to Ukraine’s attacks.
Russia’s oil pipeline giant Transneft has warned that producers may have to cut output following a slew of Ukrainian drone attacks on major Russian ports and refineries, Reuters reported this week.
Russia is also facing heightened western scrutiny over its long-running war with Ukraine. U.S. President Donald Trump was seen calling for higher trade tariffs against major buyers of Russian crude, chiefly China and India.
Any confirmed disruptions in Russian supplies stand to tighten the outlook for oil markets in the coming quarters, and could offset expectations of a looming supply glut. Fears of oversupplied markets had battered oil prices in August.
"Recent claims by Ukraine that it attacked the Saratov refinery in its latest strike on Russian energy facilities might help create a floor for oil prices at lower levels," said analysts at ING, in a note.
Oil buoyed by Fed cut expectations
The crude market also received a boost by U.S. industry data showing an outsized, 3.2 million barrel draw in inventories over the week to September 12. The data, from the American Petroleum Institute, usually heralds a similar reading from official inventory data, which is due later on Wednesday.
That said, most eyes are on the conclusion of the latest Fed meeting later in the session, amid growing confidence that the U.S. central bank will cut interest rates later on Wednesday.
The central bank is widely expected to cut interest rates by 25 basis points, with a small portion of traders also holding out for a 50 bps cut.
Expectations of a cut have offered some support to oil markets, given that lower rates tend to boost economic activity and support fuel demand.
But markets still remained largely cautious over just what the Fed will signal on future rate cuts, given that the central bank has repeatedly said that sticky inflation will deter any more monetary easing.
Ambar Warrick contributed to this article