As analysts and investors await the Federal Reserve’s announcement on interest rates later Wednesday (June 23), oil prices are trading below $78 per barrel on the New York Mercantile Exchange.

Oil has been closing in on $80 per barrel recently, but the major catalysts for the slight midweek dip include a negative outlook in Europe and uncertainty with regard to levels of supply and demand of US crude inventories.

In late London trade, the price of a barrel of benchmark crude for August delivery is currently near $77.50, down 39 cents from Tuesday’s settle price, which was $77.85.

Oil prices have been on a steady rise since touching a near-term low point around $64 in late May. The Euro’s relative stability against the dollar since the credit crisis sell-off has helped keep oil prices firm.

Some analysts have predicted that gasoline prices might have already peaked for the busy summer driving season. This would be welcomed news for consumers and businesses with heavy travel plans during the remainder of June, July and August. If this holds true, it also implies that there could be a lid on oil prices in the near-term as well.

One factor that will help support the price of oil is the likelihood that the Federal Reserve is going to keep rates steady when its announcement comes Wednesday afternoon. The maintenance of a low to no interest rate helps prop the Euro-dollar value, which usually means a boost or stability for oil prices as well.

While speculators are watching supply and demand factors, most researchers indicate that the Euro-dollar relationship with the price of oil has been the strongest of any influences on crude in the last month.

The report on crude inventory levels delivered Tuesday by the American Petroleum Institute did show a large increase of 3.7 million barrels of oil, compared to the analyst forecast of an increase closer to 1.5 million barrels. This suggests that oil consumption and demand is not building as fast as recent data might have shown.