Market Commentary on Crude Oil

 Oil prices fell nearly $1 on Wednesday ahead of the U.S. Federal Reserve's interest rate decision.

"The oil rally is taking a little break as every trader awaits a pivotal Fed decision that might tilt the scales of whether the U.S. economy has a soft or hard landing," said Edward Moya, senior market analyst at data and analytics firm OANDA.

Moya added that the oil market is still "very tight" and will remain so over the short-term.

"Unless Wall Street grows nervous that the Fed will kill the economy, the crude demand outlook should (only) gradually soften, but the oil market will easily have a supply deficit throughout winter."

"We have nudged up our 12-month ahead Brent forecast from $93 a barrel to $100 a barrel as we now expect modestly sharper inventory draws. The key reason is that significantly lower OPEC supply and higher demand more than offset significantly higher US supply," said Goldman Sachs analysts in a Wednesday note.

"Overall, we believe that OPEC will be able to sustain Brent in an $80-$105 range in 2024 by leveraging robust Asia-centric global demand growth and by exercising its pricing power assertively."

Russia's government is considering imposing export duties on all types of oil products of $250 per metric ton - much higher than current fees - from Oct. 1 until June 2024 to tackle fuel shortages, sources told Reuters on Tuesday.

Prices fell despite a bigger-than-expected draw in U.S. oil stockpiles.

Market players are expecting that the Fed would keep interest rates on hold.

Given the fundamentals and positive sentiment, we could see ICE Brent above US$100/bbl soon but won't sustain long due to growing political pressure.

Also, the Saudis and the OPEC group will probably not want to push the market too high, given the demand destruction risks.