Brent futures dropped 11 cents, or 0.13%, to $82.66 a barrel and U.S. West Texas Intermediate crude futures dropped 3 cents to $77.84 a barrel
Oil prices slid in Asian trade on Wednesday after a U.S. industry group reported crude stocks gained more than expected last week and as investors reined in expectations for interest rate cuts by the U.S. Federal Reserve.
Brent futures dropped 11 cents, or 0.13%, to $82.66 a barrel at 0403 GMT. U.S. West Texas Intermediate (WTI) crude futures dropped 3 cents to $77.84 a barrel.
The price rally has been cut short by the higher than expected US inflation print, which has the potential to push back the rate cut cycle, according to DBS Bank’s energy sector team lead Suvro Sarkar.
Additionally, inventory builds are likely to surprise on the upside this week, and an outage at the BP refinery in Whiting is also not helping matters on the demand side, he said.
U.S. crude oil inventories advanced 8.52 million barrels in the week ended February 9, per market sources citing American Petroleum Institute (API) figures released late on Tuesday.
The builds in crude oil were fairly bearish. However, this was offset by large product drops, ING analysts said in a note, adding that the data probably was a reflection of the 435,000 bpd Whiting refinery outage.
The API data showed gasoline inventories dropped 7.23 million barrels and distillate stocks dropped by 4.02 million barrels, both much larger declines than analysts anticipated.
Official data from the U.S. Energy Information Administration (EIA) is due on Wednesday at 1530 GMT.
Also weighing on the market, data on Tuesday showed U.S. consumer inflation stayed higher last month. As a result, investors now anticipate Fed policymakers to wait longer before reducing interest rates, potentially dampening economic growth and oil demand.
