Oil prices decreased on Wednesday, with data showing a larger-than-expected crude inventory build in the US, signaling a demand drop in the world’s biggest oil consumer.
International benchmark Brent crude traded at $82.20 per barrel at 10.17 a.m. local time (0717 GMT) for a 0.56% drop from the closing price of $82.66 a barrel in the previous trading session.
The American benchmark West Texas Intermediate (WTI) traded at $78.36 per barrel at the same time, for a 0.65% fall after the previous session closed at $78.87 per barrel.
The American Petroleum Institute’s latest estimate released on Tuesday revealed that crude oil inventories exceeded market expectations, increasing by 8.42 million barrels last week and marking the fourth consecutive week of rises relative to the market prediction of a stock rise of 1.8 million barrels.
Official stock data from the US Energy Information Administration will be released later on Wednesday.
The US dollar index, which measures the US dollar’s value against other currencies, increased 0.16% to 103.99.
The strong dollar is expected to lower demand by making oil more expensive for foreign currency holders.
Uncertainty as to when the US Federal Reserve (Fed) will start reducing interest rates also supported price declines.
Analysts are awaiting the release of economic data in the US along with speeches from Fed officials this week for cues on the Fed’s interest rate policy.
Fed Board member Michelle Bowman said Tuesday that the bank is in no rush to cut interest rates, given the upside risks that could halt progress in reducing inflation and cause price pressures to rise again.
However, US macroeconomic data released Tuesday signaled slowing growth and triggered concerns about a fall in oil demand.
Durable goods orders exceeded expectations by decreasing 6.1% on a monthly basis in January and recording the biggest decline since April 2020.
US Consumer Confidence data, a survey measuring consumer attitudes, spending plans, inflationary expectations, stock prices and interest rates, showed a monthly drop of 4.2 points to 106.7 in February, decreasing for the first time in four months.
Meanwhile, ongoing geopolitical risks in the Red Sea and news stories indicating that OPEC+ will extend supply cuts have limited price falls.
