WTI edges lower below $63.50 on concerns over oil demand 

• WTI price drifts lower to near $63.40 in Thursday's early European session.
• Persistent oversupply and soft fuel demand in the US weigh on the WTI. 
• Fed delivered a rate cut at its September meeting while signaling further reductions this year, which might help limit the WTI's losses. 

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $63.40 during the early European trading hours on Thursday. The WTI declines amid concerns over the US economy and excess supplies. Traders continue to assess the Federal Reserve's (Fed) rhetoric on further interest rate cuts.

US crude inventories posted a sharp decline last week as net imports fell to a record low and exports climbed to their highest level in nearly two years. Data released by the US Energy Information Administration (EIA) on Wednesday showed that crude oil stockpiles in the US for the week ending September 12 fell by 9.285 million barrels, compared to a rise of 3.939 million barrels in the previous week. The market consensus estimated that stocks would decline by 1.5 million barrels. 

Nonetheless, a larger-than-expected rise in distillate stockpiles, which increased by 4 million barrels versus predictions of a 1 million barrel increase, raised worries about demand in the world's top oil consumer and undermined the WTI price.

The Federal Reserve (Fed) decided to cut the interest rates by a quarter percentage point at its September meeting on Wednesday. This is the Fed's first reduction this year and puts the target range for its main lending rate at 4.0% - 4.25%. The US central bank penciled in two more reductions this year. Lower interest rates generally support oil demand, and the Fed's guidance suggests it now views risks from rising unemployment as outweighing those from persistent inflation.