Crude prices dipped on Wednesday, halting a three-day gain, as an unexpected surge in U.S. crude stocks raised demand worries, and investors awaited inflation data to guide interest rates.
By 0855 GMT, Brent crude slid $1.01, or 1.3%, to $76.43, while WTI declined 99 cents, or 1.3%, to $72.72.
According to market sources, U.S. oil stocks grew by 3.6 million barrels in the week ending May 5, while gasoline stockpiles jumped by 399,000.
Eight Reuters experts predicted a 900,000-barrel crude decline and a 1.2 million-barrel gasoline reduction, but the facts contradicted them. Wednesday brings U.S. government oil inventory statistics.
The unexpected U.S. inventory rise, lower crude imports, and China’s weaker export growth in April raised concerns about global oil demand.
“Crude futures were unwinding Tuesday’s modest gains early Wednesday as economic worries occupied centre stage, especially over the world’s two largest economies,” said Vandana Hari, founder of oil market monitoring service Vanda Insights.
On Wednesday, the market awaits April U.S. CPI data.
Even if the Federal Reserve withdrew advice about future rises, New York Fed President John Williams warned inflation remains too high. As a result, the central bank will raise rates again if needed.
On Thursday, OPEC will release its monthly oil report, indicating if the club and its partners will reduce supply again to support prices.
Last month, OPEC+ agreed to limit output by 1.16 million barrels per day (bpd) from May to December.
Markets were watching U.S. President Joe Biden and senior Republican legislators’ views on extending the $31.4 trillion debt ceiling, anticipating a historic default if Congress doesn’t act in three weeks.
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