Oil prices retreated in Asian trade on Wednesday as expectations for a delay in the Federal Reserve’s rate-cutting cycle and a rise in U.S. crude oil inventories offset a rise from news that OPEC+ may extend production cuts.
Brent crude oil futures were down 30 cents, or 0.36%, at $83.35 a barrel as of 03:02 GMT, while WTI was down 28 cents at $78.59 a barrel.
On Tuesday, Federal Reserve Governor Michelle Bowman signaled she was in no rush to cut US interest rates, given upside risks to inflation.
Federal Reserve Bank of Kansas City President Jeffrey Schmid made similar comments Monday, underscoring concerns that the potential economic benefits of lower interest rates will be undone.
There was some profit-taking this morning after crude oil over the past two sessions made up for the $2 per barrel Middle East risk premium it lost on Friday. This could be a reaction to the weekly US crude stockpile increase seen in API data and ongoing hopes that a ceasefire agreement in Gaza will be reached in the next few days.
The mediators warn Hamas and Israel about progress towards a ceasefire in Gaza. Biden said that Israel agreed to stop military activities in Gaza due to the month of Ramadan, the holy month of Muslims.
US crude oil inventories rose by 8.43 million barrels in the week ending Feb. 23, according to figures from the American Petroleum Institute (API) on Tuesday.
Data showed gasoline stocks fell by 3.27 million barrels and distillate stocks fell by 523,000 barrels.
Brent and WTI futures rose more than $1 a barrel on Tuesday after the Organization of the Petroleum Exporting Countries and its Russia-led allies (OPEC+) said they would consider extending voluntary oil production cuts into the second quarter.
While OPEC+ sources say that production cuts are likely to be extended until the second quarter, some say a longer extension is possible until the end of 2024. Such a move by the OPEC+ alliance would likely tighten the market.
Last November, OPEC+ agreed to voluntary cuts of around 2.2 million barrels per day (bpd) in the first quarter of this year, led by Saudi Arabia lifting its voluntary cut.
Russian authorities on Tuesday announced a six-month gasoline export ban starting March 1 to compensate for increased demand from consumers and farmers and to allow for planned maintenance of refineries.
