Oil prices closed slightly lower Wednesday, snapping a two-day winning streak even after the Federal Reserve cut interest rates for the first time in years.

The central bank slashed rates by a half point, a bigger move than many had expected. Though prices clawed back losses from earlier in the session, the response in the oil market was subdued.

“A 50 basis point cut is slightly supportive of the oil market since it translates into a weaker dollar and stronger prices for dollar denominated commodities,” said Andy Lipow, president of Lipow Oil Associates.

Here are Wednesday’s closing energy prices:

  • West Texas Intermediate October contract: $70.91 per barrel, down 28 cents, or 0.39%. Year to date, U.S. crude oil has fallen about 1%.
  • Brent November contract: $73.65 per barrel, down 5 cents, or 0.07%. Year to date, the global benchmark has declined about 4%.
  • RBOB Gasoline October contract: $2.01 per gallon, up 0.44%.Year to date, gasoline has shed more than 4%.
  • Natural Gas October contract: $2.284 per thousand cubic feet, down nearly 1.72%. Year to date, gas has pulled back about 9%.

Matt Smith, lead oil analyst for the Americas at Kpler, said the oil rally in the previous sessions had largely already been priced into a rate cut. “Hence the response may be muted,” Smith said.

The oil market has been rattled this month by worries about a growing imbalance between supply and demand. U.S. crude and global benchmark Brent have fallen about 13% in the third quarter.

Consumption in China is slowing as electric vehicle sales surge in the world’s largest crude importer. At the same time, OPEC+ is expected to increase production in December as output in the U.S., Canada, Brazil and Guyana remains strong.

“We are not expecting fireworks in the sky following Fed rate cuts,” said Manish Raj, managing director of Velandera Energy Partners. 

“The Fed action is unlikely to suddenly spur demand, which has otherwise been soft,” Raj said. “Nobody is hitting the gas stations just because the Fed decides to cut the rates today.”

U.S. commercial crude stockpiles fell by 1.6 million barrels for the week that ended Sept. 13, according to the Energy Information Administration. Meanwhile, gasoline inventories rose by 100,000 barrels, according to the data.

Geopolitical tensions are also escalating in the Middle East again as fears grow that a major conflict between Israel and the Iran-backed militia Hezbollah is on the horizon. Hundreds of pagers exploded in Lebanon on Tuesday in an attack targeting Hezbollah militia members.

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