Oil falls with US data signaling weak demand amid persistent woes on Fed rate hike

Oil falls with US data signaling weak demand amid persistent woes on Fed rate hike

Both benchmarks hit their highest level since April over supply concerns ahead of upcoming OPEC+ output cuts in August

By Sibel Morrow

ANKARA (AA) - Oil prices declined on Wednesday from their three-month highs over US bearish oil demand data and uncertainties ahead of the much-anticipated US Federal Reserve (Fed) meeting later on Wednesday.

International benchmark Brent crude traded at $82.92 per barrel at 9.52 a.m. local time (0652 GMT), a 0.39% loss from the closing price on Tuesday of $83.25 a barrel.

The American benchmark West Texas Intermediate (WTI) traded at the same time at $79.25 per barrel, down 0.47% from the session close of $79.63 per barrel on Tuesday.

Brent briefly hit $83.87 per barrel and WTI briefly reached $79.90 per barrel as both benchmarks reached their highest levels since April due to concerns over tighter supply days before new OPEC+ output cuts take effect. During the early Asian trading session, prices started to fall as investors sold their holdings to profit from high oil prices.

The anticipated increase in US crude oil inventories mostly negatively impacted prices, and investors are also counting on a second interest rate hike from the Fed to crush inflation after a brief lull in June.

Signaling a demand drop in the US, the world’s largest oil-consuming country, inventories rose by 1.3 million barrels per day (bpd) against the market expectation of a 1.9 million bpd fall, according to data by the American Petroleum Institute released late on Tuesday.

Investors are eagerly anticipating Fed Chair Jeremy Powell's news conference later on Wednesday to learn more about the Fed's strategy for combating inflation.

Despite indications that inflation will continue to fall, analysts say Powell may leave the door open to at least one more rate rise this year, depending on incoming economic data releases.

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