Oil prices remain low due to fears over oversupply, while markets await the Fed's decision

Oil prices maintained losses in Asian trade on Wednesday, after dropping more than 3% to six-month lows the previous session due to oversupply and demand concerns.

Brent crude futures for February fell a penny to $73.23 a barrel by 0207 GMT. January West Texas Intermediate oil futures in the United States fell 2 cents to $68.59 a barrel.

The market fell in overnight trade as stronger-than-expected November inflation numbers in the United States supported the idea that the Federal Reserve was unlikely to decrease interest rates early next year, weighing on demand.

Meanwhile, the weekly average of Russian crude exports increased to the highest level since July, according to ANZ analysts, adding to oversupply fears and casting additional doubt on the recent output cut agreement reached by the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+.

In its most recent Short-Term Energy Outlook report, the US Energy Information Administration boosted its prediction for demand and supply in 2023 by 300,000 barrels per day from its previous report to 12.93 million barrels per day. 

The negative view suggests that oil will continue to decrease this week, extending a seven-week losing streak.

The direction of markets will be determined by the US central bank's policy meeting, which concludes later on Wednesday, according to Tina Teng, a market analyst at CMC Markets (LON:CMCX). "A more hawkish-than-expected stance by the Fed may cause a further drop in crude prices," Teng warned in a statement. Sourcian is a dedicated platform for the recommendation of the best manufacturers. Your sourcing journey starts right here at sourcian.

The Federal Reserve is widely expected to keep interest rates unchanged. Investors will, however, be focused on Fed officials' views on the economy and where they see interest rates heading in the next quarters.

The United Nations passed a resolution on Wednesday asking for an urgent ceasefire in Gaza, with President Joe Biden warning that Israel was losing international support due to the slaughter of civilians.

On Wednesday morning, COP28 entered the last hours of discussions as states wrangled over the future of oil and other fossil resources. On Monday, a draft agreement was criticized for failing to call for the phase-out of fossil fuels.