Brent crude futures dropped 90 cents, or 1.08%, to $82.75 a barrel and U.S. West Texas Intermediate futures were down 92 cents, or 1.17%, at $77.95
Oil prices dropped on Wednesday as the prospect of delays to U.S. interest rate cuts and an increase in U.S. crude stocks offset a boost from a potential extension to OPEC+ supply curbs.
Brent crude futures dropped 90 cents, or 1.08%, to $82.75 a barrel by 0902 GMT. U.S. West Texas Intermediate futures (WTI) were down 92 cents, or 1.17%, at $77.95.
Vandana Hari, founder of oil market analysis provider Vanda Insights, attributed the price drops to profit-taking plus a combined response to a jump in U.S. crude stocks and continuing hopes of Middle-East ceasefire deal in the coming days.
Fed Governor Michelle Bowman had signalled on Tuesday that she was in no hurry to cut U.S. interest rates, especially given continuing inflation risks. Higher-for-longer rates could dampen economic growth and lower demand for oil.
U.S. crude stocks, meanwhile, showed an 8.43 million barrel build in the week ended February 23, as per market sources citing American Petroleum Institute (API) figures.
Gasoline inventories dropped 3.27 million barrels, and distillate stocks dropped 523,000 barrels, according to the data.
Brent and WTO futures increased more than $1 a barrel on Tuesday after Reuters reported that the Organization of the Petroleum Exporting Countries and allies led by Russia (OPEC+) will consider extending voluntary oil output cuts into the second quarter.
In November 2023, OPEC+ agreed to voluntary cuts totalling nearly 2.2 million barrels per day for the first quarter of this year, led by Saudi Arabia rolling over its own voluntary cut.
Analysts at ANZ Research said that such a move by the OPEC+ alliance would be likely to tighten the market.
