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Oil Prices Retreat on Surging US Crude Inventories and Diminished Rate Cut Expectations
Early Asian trading on Wednesday saw a decline in oil prices following reports from the American Petroleum Institute (API) indicating a significant buildup in US crude inventories last week, coupled with shifting sentiments regarding potential interest rate cuts by the Federal Reserve.
Brent crude futures dipped by 29 cents, or 0.4 percent, to $82.48, while US West Texas Intermediate (WTI) crude futures retreated by 22 cents, or 0.3 percent, to $77.65 per barrel upon the market’s opening at 0000 GMT.
Market sources, referencing API data released late Tuesday, revealed a substantial increase of 8.52 million barrels in US crude oil inventories for the week ending February 9, far surpassing the 2.6 million barrels expected by analysts.
Additionally, the API data unveiled a notable decline in gasoline inventories by 7.23 million barrels and distillate inventories by 4.02 million barrels, both exceeding analysts’ projections.
Investor attention also turned to the forthcoming release of official data from the US Energy Information Administration (EIA) scheduled for Wednesday at 1530 GMT.
Tuesday’s data revealing sustained high consumer price inflation in the US last month has reshaped expectations regarding the Federal Reserve’s monetary policy, prompting investors to anticipate a delay in interest rate cuts. This adjustment in expectations propelled the dollar to its highest level in three months, potentially impacting oil demand as buyers using other currencies may face increased costs.
The market remains attuned to these developments as they shape near-term oil price dynamics amid evolving economic and policy landscapes.
