FILE PHOTO: An aerial view shows Vladimir Arsenyev tanker at the crude oil terminal Kozmino on the shore of Nakhodka Bay near the port city of Nakhodka, Russia August 12, 2022. REUTERS/Tatiana Meel/File Photo
By Laura Sanicola
(Reuters) -Oil prices slipped more than $1 on Wednesday as U.S. commercial inventories rose, while weaker economic data from China and dimmed prospects of interest rate cuts stoked worries about global demand.
Brent futures for June were down $1.01, or 1.32, to $89.01 a barrel at 11:19 a.m. EST (1619 GMT), while U.S. crude futures for May were down 88 cents, or 1%, at $84.48 a barrel. Both were on track for their biggest fall since March 20.
Oil prices have softened this week as economic headwinds curb gains from geopolitical tensions, with markets eyeing how Israel might respond to Iran’s weekend attack.
Analysts do not expect Iran’s unprecedented missile and drone strike on Israel to prompt dramatic U.S. sanctions on Iran’s oil exports.
“Oil prices go about their business of unwinding some of the war premium that has been priced in,” said John Evans at oil broker PVM, adding that they also faced “a setback in interest rate cut hopes.”
Crude inventories rose by 2.7 million barrels to 460 million barrels in the week ending April 12, the EIA said, nearly double analysts’ expectations in a Reuters poll for a 1.4 million-barrel build.
“The direction of the market is still going to be dictated by events in the Middle East and the ramifications of whatever retaliation Israel takes on Iran,” said Andrew Lipow, president of Lipow Oil Associates in Houston.
Top Federal Reserve officials including Chair Jerome Powell backed away on Tuesday from providing any guidance on when interest rates may be cut, dashing investors’ hopes for meaningful reductions in borrowing costs this year.
Britain’s inflation rate slowed by less than expected in March, signaling that a first rate cut by the Bank of England could also be further off than previously thought.
However, inflation slowed across the euro zone last month, reinforcing expectations for a European Central Bank rate cut in June.
In China, the world’s biggest oil importer, the economy grew faster than expected in the first quarter, but several other indicators showed that demand at home remains frail.
Elsewhere, Tengizchevroil announced plans for scheduled maintenance at one of six production trains at the Tengiz oilfield in Kazakhstan in May.
(Additional reporting by Deep Vakil in Bengaluru, additional reporting by Ahmad Ghaddar in London, Yuka Obayashi in Tokyo and Trixie Yap in Singapore; editing by Mark Potter and Richard Chang)
News Related-
The best Walmart Cyber Monday deals 2023
-
Jordan Poole took time to showboat and got his shot blocked into the stratosphere
-
The Top Canadian REITs to Buy in November 2023
-
OpenAI’s board might have been dysfunctional–but they made the right choice. Their defeat shows that in the battle between AI profits and ethics, it’s no contest
-
Russia-Ukraine Drone Warfare Rages With Dozens Headed for Moscow, Amid Deadly Winter Storm
-
Trump tells appeals court that threats to judge and clerk in NY civil fraud trial do not justify gag order
-
Can Anyone Take Paxlovid for Covid? Doctors Explain.
-
Google this week will begin deleting inactive accounts. Here's how to save yours.
-
How John Tortorella's Culture Extends from the Philadelphia Flyers to the AHL Phantoms
-
Tri-Cities' hatcheries report best Coho return in years
-
Wild release Dean Evason of head coaching duties
-
Air New Zealand’s Cyber Monday Sale Has the 'Lowest Fares of 2023' to Auckland, Sydney, and More
-
NDP tells Liberals to sweeten the deal if pharmacare legislation is delayed
-
'1,000 contacts with a club': Tiger Woods breaks down his typical tournament prep to college kids in fascinating video