Oil prices fell in early trade on Wednesday after industry data showed a surprise build in U.S. crude inventories against analysts’ forecast of a decline, reinforcing fears about weakening demand even as supply tightens.
Brent crude futures dropped 19 cents, or 0.2%, to $80.49 per barrel, while U.S. West Texas Intermediate (WTI) crude futures fell 15 cents, or 0.2%, to $75.24 at 0414 GMT.
Market players are also taking profits as risks persist ahead of a U.S. Federal Open Market Committee meeting, said Tina Teng, a CMC Markets analyst. “But I still expect that oil prices may continue their recent rebounding pace,” she said, adding that previous selloffs, fuelled by fears of recession, had paused after two consecutive data releases indicated cooler U.S. inflation.
U.S. Federal Reserve policymakers are expected to raise interest rates by 50 basis points on Wednesday, slowing from the 75-basis-point pace they had stuck to in meetings since June as they grapple with inflation.
The U.S. consumer price index rose 0.1% in November after advancing 0.4% the previous month. “Any commentary from the Fed indicating further deceleration of rate hikes in the U.S. would be supportive to oil prices from here,” said Baden Moore, head of commodities research at National Australia Bank.
