Oil futures slid nearly 2% on Wednesday as investors awaited the Organisation of the Petroleum Exporting Countries and allies (OPEC+) decision on production cuts, despite a sharper-than-expected draw in US crude inventories providing some support.

Brent crude futures dropped by US$1.31, or 1.78%, to settle at US$72.31 a barrel, while US West Texas Intermediate (WTI) crude fell US$1.40, or 2%, to close at US$68.54. The dip followed a 2.5% rally on Tuesday, marking Brent's largest gain in two weeks.

OPEC+ is set to meet on Thursday, with industry sources suggesting the alliance is likely to extend output cuts through the first quarter of 2025. Analysts noted that market sentiment hinges on the meeting's rhetoric. "The rhetoric out of the meeting is going to have the biggest sway," remarked Kpler Lead Americas Oil Analyst Matt Smith.

Meanwhile, US crude stockpiles declined more than anticipated last week as refiners ramped up operations, according to the Energy Information Administration (EIA). However, gasoline and distillate inventories rose more than expected, driven by increased refining activity.

Global geopolitical tensions also influenced the market. Israel indicated it would resume military action against Hezbollah if a fragile truce collapses, while South Korea faced political uncertainty following President Yoon Suk Yeol's brief declaration of martial law.

The market awaits OPEC+ decisions, with potential extensions of production cuts and geopolitical developments expected to influence oil prices in the coming days.