Oil slips as investors lock in profits ahead of Fed update | Reuters

Oil slips as investors lock in profits ahead of Fed update | Reuters

Oil prices slipped on Wednesday as investors locked in profits ahead of an update from the U.S. Federal Reserve and the U.S. Energy Information Administration's inventory data, but concerns over tighter supply amid geopolitical tensions capped losses.

Oil prices hit seven-year highs last week on worries that supplies could tighten due to Ukraine-Russia tensions. U.S. President Joe Biden said on Tuesday he would consider personal sanctions on President Vladimir Putin if Russia invades Ukraine, while Western leaders stepped up military preparations and made plans to shield Europe from a potential energy supply shock. read more

Concerns about the Middle East also rose on Monday, when Yemen's Iran-aligned Houthi movement launched a missile attack on a United Arab Emirates base hosting the U.S. military. The attack was thwarted by U.S.-built Patriot interceptors, U.S. and Emirati officials said. read more

"The market downside is limited due to heightened tensions between Russia and Ukraine and the threat to infrastructure in the UAE," Hiroyuki Kikukawa, general manager of research at Nissan Securities said, adding that oil was likely to continue its upward run after the Federal Reserve policy meeting.

Brent crude futures were down 32 cents, or 0.4%, at $87.88 a barrel at 0513 GMT, having jumped 2.2% in the previous session.

U.S. West Texas Intermediate (WTI) crude futures slipped 45 cents, or 0.5%, to $85.15 a barrel, having climbed 2.8% on Tuesday.