Oil declines as US inventories rise and global demand concerns

Oil prices fell for the third straight session on Wednesday, amid the potential impact of rising US crude inventories, global demand concerns stemming from weak economic data from China and bleak prospects for an interest rate cut.

Brent crude futures for June delivery fell 21 cents, or 0.2 percent, to $89.81 a barrel by 0915 GMT, and US crude futures for May delivery fell 19 cents, or 0.2 percent, to $85.17 a barrel.

Oil prices have been declining since the beginning of the week, as unfavorable economic conditions put pressure on investor morale, limiting gains resulting from geopolitical tensions, amid anticipation of how Israel will respond to the attack launched by Iran at the beginning of the week.

Analysts do not expect the United States to impose strict sanctions on Iranian oil exports due to the attack launched by Tehran on Israel with missiles and drones.

Senior Federal Reserve officials, including Chairman Jerome Powell, on Tuesday declined to provide any indications about the possible date for cutting interest rates, dashing investors’ hopes of significantly reducing borrowing costs this year.

In China, the world’s largest oil importer, the economy grew faster than expected in the first quarter, but a number of March indicators, such as real estate investment, retail sales and industrial production, showed that demand at home is still weak, affecting the overall momentum.

According to a Reuters poll, US crude inventories increased by about 1.4 million barrels last week.

Official data from the Energy Information Administration, the statistical arm of the US Department of Energy, is scheduled for release at 1430 GMT on Wednesday.