Oil slips further on US demand, interest rate fears

Oil prices on Thursday extended declines from the previous session after a larger-than-expected build in U.S. crude stockpiles stoked worries about slow demand, while signs that U.S. interest rates could remain elevated added to pressure, News.Az reports citing Reuters. 

Brent crude futures fell 14 cents, or 0.2%, to $83.54 a barrel by 0420 GMT. U.S. West Texas Intermediate crude futures were down 4 cents, or 0.1%, to $78.50 a barrel.

U.S. crude oil stockpiles rose while gasoline and distillate inventories fell last week as refiners ran at below seasonal lows due to planned and unplanned outages, the Energy Information Administration said on Wednesday. [EIA/S]

Crude inventories rose for the fifth consecutive week, increasing by 4.2 million barrels to 447.2 million barrels in the week ended Feb. 23, the EIA said, compared with analysts' expectations in a Reuters poll for a 2.7 million-barrel rise.

"Large stockpiles heightened investors' worries over a slow economy and reduced oil demand in the U.S.," said Satoru Yoshida, a commodity analyst with Rakuten Securities.

"The anticipation of delayed U.S. rate cuts also weighed on the market sentiment as it could undermine oil demand," he said.

High borrowing costs typically reduce economic growth and oil demand.

Traders have already dialled back expectations for U.S. interest rate cuts after a slew of strong data, including hot consumer price index and producer price index readings. They expect an easing cycle to kick off in June, compared with the start of 2024 when bets were on March.

Market participants are now waiting for the U.S. personal consumption expenditures price index, the Federal Reserve's preferred measure of inflation, for more trading cues.

The index, to be released on Thursday, is expected to show prices ticked up 0.3% on a monthly basis in January.

The market also eyed the possible extension of voluntary oil output cuts from OPEC+, which has limited price declines for now.

News.Az 



News.Az 

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