Oil prices fell for the third straight session on Wednesday, on expectations that the Federal Reserve could hold U.S. interest rates longer due to sustained inflation, which could impact usage. fuel in the world’s largest oil consumer.
Brent crude futures were down 60 cents, or 0.7%, at $82.28 a barrel, while U.S. West Texas Intermediate (WTI) crude futures slipped 64 cents, or 0.8%, to $78.02 at 0346 GMT Wednesday.
Oil prices fell about 1% on Tuesday.
Fed policymakers said Tuesday that the U.S. central bank should wait several more months to ensure inflation is actually back toward its 2% target before cutting interest rates.
Rising borrowing costs can slow economic growth and weigh on oil demand.
U.S. crude oil and gasoline inventories increased last week, while distillate product inventories declined, according to market sources citing figures from the American Petroleum Institute (API) on Tuesday.
As Memorial Day approaches, which marks the start of the summer driving season in the United States, retail gasoline prices have fallen for the fourth week in a row. U.S. prices for diesel, a refined product critical to the industrial and transportation sector, also fell.
Investors await minutes from the Fed’s latest policy meeting and weekly oil inventory data from the U.S. Energy Information Administration (EIA), due out later today from Wednesday.
“The Federal Open Market Committee (FOMC) minutes will be scrutinized for the Fed’s assessment of bumpy first-quarter inflation and clues on the timing and extent of potential interest rate cuts in 2024,” ANZ analysts said in a report.
“It’s more of a wait-and-see approach to what the data tells us,” ANZ said.
The Eurozone has all but promised an interest rate cut on June 6 due to a more positive economic outlook. European Central Bank President Christine Lagarde said in an interview broadcast Tuesday that she was “really confident” that euro zone inflation was under control. (Reporting by Sudarshan Varadhan; Editing by Jamie Freed and Edwina Gibbs)
