Singapore, March 22 (BNA): Oil fell in Asian trading this morning, paring its gains for two consecutive days, after an industrial report showed that US crude inventories rose unexpectedly last week, in a sign of weak demand for fuel.
Brent crude futures, which have risen more than 3 percent this week, were down 37 cents, or 0.5 percent, at $74.95 a barrel at 0400 GMT.
US West Texas Intermediate crude futures fell 39 cents, or 0.6%, to $69.28, according to Reuters.
Sources said that data from the American Petroleum Institute showed that US crude stocks rose by about 3.3 million barrels in the week ending March 17.
That defied expectations of eight analysts polled by Reuters for a decline of about 1.6 million barrels.
Traders and analysts will be watching data from the US Energy Information Administration on Wednesday to see if it confirms signs of weak demand for crude oil.
Meanwhile, markets await the outcome of the US Federal Reserve’s meeting on Wednesday, in what is widely seen as the Fed’s most challenging policy decision in recent times.
After the meeting, Chairman Jerome Powell is expected to unveil new economic projections and the central bank’s path to raising interest rates.
A pause in interest rate hikes could help fuel economic activity and thus increase fuel demand.
Oil prices recorded their sharpest decline in months last week, after the high-profile US bank failures that began on March 10 and a crisis at Credit Suisse in Europe.
An emergency rescue by Credit Suisse over the weekend helped oil prices recover.
ANZ analysts said senior traders see underlying oil issues driving prices higher.
“There are concerns that supply could be hit more than demand amid the banking crisis,” ANZ analysts said in a note to clients. “US shale oil production is most at risk from a tightening of credit conditions from regional US banks.”
NAA