Oil recovers slightly after Federal Reserve rate cut.

U.S. crude, WTI, closed at $70.91 per barrel, while Brent crude settled at $73.65 per barrel, recovering ground following the Federal Reserve’s decision.

Oil limited its losses on Wednesday after spending most of the session in the red, aided by the Fed’s interest rate cut.

Brent crude for November delivery fell a marginal 0.07% to $73.65 per barrel.

Meanwhile, West Texas Intermediate (WTI) for October delivery dropped 0.39% to $70.91 per barrel.

WTI had lost more than 2% before recovering after the Fed’s announcement, which cut its benchmark interest rates by half a percentage point.

Monetary easing reduces the cost of borrowing, boosting the consumption of goods and services, particularly energy.

Additionally, when a central bank cuts rates, it weakens its currency. Since oil is traded in U.S. dollars, this makes barrels cheaper for investors using other currencies.

Traders paid little attention to the U.S. Energy Information Administration’s (EIA) weekly report, which showed a 1.6 million barrel drop in U.S. commercial oil inventories—well above the 200,000 barrels expected by the market.

Market expectations for the size of the rate cut had been volatile in recent days. Last week, there was a 65% chance of a 25 basis point cut, while on Wednesday, CME’s FedWatch tool showed a 57% chance of a 50 basis point reduction.

The S&P 500 lost 16.32 points, or 0.29%, closing at 5,618.26; the Nasdaq Composite fell 54.76 points, or 0.31%, to 17,573.30; and the Dow Jones Industrial Average dropped 103.08 points, or 0.23%, to 41,503.10.

Markets are now fully pricing in at least a 25 basis point cut at the Fed’s November meeting, with around a 35% probability of another 50 basis point reduction.