Oil falls on Druzhba pipeline news, US inflation expectations

Oil prices fell on Wednesday, amid expectations that flows will resume through the Druzhba pipeline soon, and concerns about demand ahead of the release of major indicators regarding it.

Brent crude futures were down 73 cents, or 0.76 percent, at $95.58 a barrel by 0928 GMT.

US West Texas Intermediate crude futures fell 64 cents, or 0.71 percent, to $89.86.

The two contracts had fallen by more than a dollar a barrel earlier in the session.

The Hungarian energy group MOL said the flow of oil to central Europe via the Druzhba pipeline would resume shortly after the group diverted transit fees for using the Ukrainian section of the pipeline.

Analysts said demand concerns also weighed on prices.

“Fears of demand undermining as a result of a recession are the biggest driver of prices at the moment and the main reason why Brent crude is trading below $100 a barrel,” BVM analyst Stephen Brennock said.

The CPI report, due at 1230 GMT on Wednesday, will be scrutinized for guidance on how aggressively the US Federal Reserve will raise interest rates in the coming months.

US crude oil inventories rose by about 2.2 million barrels in the week ending August 5, according to market sources, citing figures from the American Petroleum Institute. Analysts polled by Reuters had expected crude stocks to rise by about 100,000 barrels.

Official government data is due later on Wednesday.