Crude Oil little changed as Fed holds rates and Iran considers Qatari deal

• The Fed's decision to leave rates unchanged draws little response from WTI, which holds near $102.00 after rising from below $100.00.
• A 1.9 million-barrel decline in US Crude Oil inventories contrasts with a 3.9 million increase in gasoline stocks.
• A response from Iran to Qatar's draft agreement to end the war is expected by Friday.

The Fed's decision to keep rates unchanged has less significance for Crude Oil than Qatar's draft agreement to end the war, with Iran expected to respond before the weekend. Following little reaction to the statement, WTI trades near $102.00. That leaves it below its pre-decision session high of just under $103.00.

Iran is reviewing the draft delivered by Qatari mediators, an official told Reuters on Wednesday. According to The Wall Street Journal, Washington has advised Gulf states to prepare for a possible resumption of the US campaign against Iran after the 3 November midterms. Both possible outcomes alter the volume of Gulf Crude Oil available to buyers, and thus the supply against which WTI is priced.

US Crude Oil inventories, which underpin WTI, declined by 1.9 million barrels in the week to 23 October, the Energy Information Administration (EIA) reported. Gasoline stocks, by contrast, increased by 3.9 million. A 5.2% contraction in global supply is expected by the World Bank in 2026, the largest in more than four decades apart from 2020. Also on Wednesday, Abu Dhabi National Oil Company (ADNOC) informed customers that its pipeline bypassing the Strait of Hormuz would begin operating in early 2027.

US GDP Leads the Economic Calendar

No specific day has been set for Tehran's response to the Qatari draft, although it is expected before the weekend. Due on Thursday at 12:30 GMT, the advance estimate of third-quarter US Gross Domestic Product (GDP) provides the week's principal gauge of the US demand underpinning WTI.

At his Wednesday press conference at 18:30 GMT, Fed Chair Warsh will speak publicly for the first time since Fed officials entered their quiet period on 17 October. A day before that period began, he described inflation as uncomfortably high. Whether he attributes this to energy costs feeding through to other prices has implications for a December rate rise, which would weigh on that same US demand.

WTI Advances as Intraday Momentum Improves

From an opening level just below $100.00 on Wednesday, WTI has spent most of the session moving higher. The bars following the EIA release included one of the larger advances. Before the Fed decision, however, a single five-minute bar reversed more than half of the gain made since that report. Intraday momentum has recovered from close to oversold territory.

WTI spot chart: 5-minute interval