Oil prices dip after unexpected rise in US crude stocks
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Brent crude futures eased 27 cents, or 0.4 per cent, to US$74.01 a barrel by 8.19am Singapore time.
PHOTO: REUTERS
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HOUSTON - Oil prices inched lower on Wednesday after industry data showed an unexpected rise in US crude stocks, signalling weak demand to markets already worried about recession and disappointing Chinese economic data.
Brent crude futures eased 27 cents, or 0.4 per cent, to US$74.01 a barrel by 8.19am Singapore time.
US West Texas Intermediate crude was at US$69.13 a barrel, down 29 cents, or 0.4 per cent.
Both benchmarks climbed more than 3 per cent on Tuesday on hopes of rising fuel demand after China’s central bank lowered a short-term lending rate.
Prices fell by 4 per cent on Monday on concerns about the Chinese economy after disappointing economic data last week.
US crude oil stocks rose by about 1 million barrels in the week ended Friday, according to market sources citing American Petroleum Institute figures on Tuesday. This is contrary to the average estimate for a 510,000 million barrel decline according to analysts polled by Reuters.
Government data on stockpiles is due later in the day.
Market participants were also closely watching a United States Federal Reserve meeting, which has no pre-determined interest rate hike on the table.
Rate hikes strengthen the dollar, making commodities denominated in the US currency more expensive for holders of other currencies and weighing on prices.
With still too hot inflation riding their heels but abundant uncertainty about both the economic outlook and the lagged effects of 10 rate hikes since March 2022, a breather from increases looks to be in the cards when the rate setting Federal Open Market Committee meeting concludes on Wednesday.
Economists expects the Bank of Canada to raise interest rates again in July to 5 per cent after a surprise 25 basis point increase last week.
The European Central Bank is also expected to hike interest rates by another quarter percentage point on Thursday to tame stubborn inflation.
But the Bank of Japan, which will announce its plan on Friday, is expected to maintain its ultra-loose policy.
Meanwhile, Opec+ has granted Russia a slightly higher oil production baseline, meaning Russia can produce more under the latest quotas than previously agreed. REUTERS
