Singapore, Sept. 14 (BNA): Oil prices fell slightly on Wednesday amid fears of another interest rate hike by the US Federal Reserve next week after consumer prices rose unexpectedly in August, outweighing support from OPEC’s strong forecast for oil demand growth. .
Brent crude futures were down 38 cents, or 0.4 percent, at $92.79 a barrel by 04:07 GMT. US West Texas Intermediate crude was at $87.02 a barrel, down 29 cents, or 0.3%.
Pressure on prices was the hotter-than-expected US inflation report on Tuesday that dashed hopes that the Federal Reserve may lower interest rate policy tightening in the coming months. Federal Reserve officials are scheduled to meet next Tuesday and Wednesday, with inflation remaining above the US central bank’s 2% target, Reuters reported.
“The strength of the US dollar and expectations of a massive rate hike by the Federal Reserve have weighed on sentiment,” said Tina Ting, analyst at CMC Markets.
The dollar jumped near a 24-year high against the yen on Wednesday. Oil is generally priced in US dollars, so a strong dollar makes the commodity more expensive for holders of other currencies.
In China, ongoing severe COVID-19 restrictions are slashing fuel demand for the world’s largest oil importer.
“China’s no-coronavirus policy remains in place, and this will keep any recovery seen over the coming weeks capped,” Edward Moya, senior market analyst at OANDA, said in a note.
“The United States is the big suitor and if demand expectations decline, oil may resume its downward trajectory that has been in place since the beginning of the summer.”
On the supply front, US crude stocks rose by about six million barrels for the week ending September 9, according to market sources, citing figures from the American Petroleum Institute on Wednesday.
The US government will release inventory data at 10:30 AM ET (14:30 GMT) on Wednesday.
In the framework of supporting oil prices, the Organization of the Petroleum Exporting Countries (OPEC) on Tuesday reiterated its forecasts for the growth of global oil demand in 2022 and 2023, citing signs that major economies were better than expected despite headwinds such as high inflation.
OPEC said in a monthly report that oil demand will increase by 3.1 million barrels per day in 2022 and 2.7 million barrels per day in 2023, leaving its forecast unchanged from last month.
HF