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West Texas Intermediate (WTI) Oil price depreciates after registering 2.86% gains in the previous session, trading around $62.40 per barrel during the European hours on Wednesday. WTI price hit a four-month high of $62.85 at earlier hours, driven by supply risks persisting.

US crude output declined by as much as 2 million barrels per day, around 15% of total production, and temporarily disrupted Gulf Coast exports as energy infrastructure and power grids were strained. Icy, wet conditions across parts of the South are likely to delay restarts, per Reuters.

Traders are closely monitoring the US military buildup in the Middle East amid rising risks of potential action against Iran. A US aircraft carrier and accompanying warships have arrived in the region, two US officials told Reuters on Monday, expanding President Donald Trump’s ability to defend US forces or potentially carry out military action against Iran.

The American Petroleum Institute (API) reported that US Weekly Crude Oil Stock fell by 0.25 million barrels in the week ended January 23, following a 3.04 million-barrel build the previous week.

Meanwhile, the US dollar (USD) slid to its lowest level in nearly four years, enhancing the appeal of dollar-denominated Oil for buyers. Meanwhile, US President Donald Trump said the USD’s value is “great” when asked if it had fallen too much.

Traders await the US Federal Reserve (Fed) policy decision later in the day, expecting the central bank to keep rates unchanged at 3.50%–3.75% at the end of its two-day meeting on Wednesday, following three consecutive rate cuts in 2025. Markets will focus on the post-meeting press conference for guidance on the policy outlook in the months ahead.

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