Oil prices fell for a third consecutive session on Wednesday on expectations that the Fed may keep U.S. interest rates higher for longer due to ongoing inflation, potentially affecting fuel use by the world’s largest oil consumer.
Brent crude futures were down 71 cents, or 0.9%, at $82.17 a barrel, while WTI futures were down 73 cents, or 0.9%, at $77.93 a barrel by GMT 06:50.
The U.S. central bank has said it will need to wait a few more months to make sure inflation is truly on track toward its 2 percent target before cutting interest rates.
Higher borrowing costs could slow economic growth and suppress oil demand.
U.S. crude oil and gasoline inventories rose last week, while distillates fell, according to figures from the American Petroleum Institute (API) on Tuesday.
Retail gasoline prices fell for a fourth consecutive week ahead of this weekend’s Memorial Day holiday, which kicks off the busy U.S. summer driving season. US prices of diesel, an important refined product for both the industrial sector and the transportation sector, also fell.
Investors are awaiting minutes from the Fed’s latest policy meeting and weekly US oil inventory data from the US Energy Information Administration (EIA) to be released later on Wednesday.
By the way, Federal Open Market Committee (FOMC) minutes are also being watched for clues about the Fed’s assessment of bumpy first-quarter inflation and the timing and scope of potential interest rate cuts in 2024.
The eurozone has promised to cut interest rates on June 6 due to a more positive economic outlook. European Central Bank President Christine Lagarde said she was confident euro zone inflation was under control in an interview published on Tuesday.
