Oil eases as Fed caution, stock build outweigh OPEC+ news
By Mohi Narayan
NEW DELHI (Reuters) — Oil prices pulled back in Asia on Wednesday as the prospect of a delay in the U.S. rate-cutting cycle and a rise in U.S. crude stocks offset a boost on Tuesday from news OPEC+ might extend its output cuts.
Brent crude futures fell 30 cents, or 0.36%, to $83.35 a barrel by 0302 GMT, while U.S. West Texas Intermediate futures (WTI) dropped 28 cents to $78.59 a barrel.
On Tuesday, Federal Reserve Governor Michelle Bowman signalled she is in no rush to cut U.S. interest rates, particularly given upside risks to inflation that could stall progress on controlling price pressures or even lead to their resurgence.
Kansas City Federal Reserve Bank President Jeffrey Schmid made similar remarks on Monday. Their remarks underlined concern in financial markets that the potential economic benefits of lower rates will be pushed back.
«There is some profit-taking this morning after the past two sessions recouped the $2 per barrel of Mideast risk premium that crude shed on Friday,» said Vandana Hari, founder of oil market analysis provider Vanda (NASDAQ:VNDA) Insights.
«It's a combined response to the weekly U.S. crude stock surge in the API data this morning and continuing hope that a Gaza ceasefire deal will be reached in the next few days,» Hari added.
On Tuesday, U.S. President Biden said Israel has agreed to halt military activities in Gaza for the Muslim holy month of Ramadan. However, Israel and Hamas as well as Qatari mediators all sounded notes of caution about progress towards a truce in Gaza.
U.S. crude stocks rose 8.43 million barrels in the week ended Feb. 23, according to market sources citing American Petroleum Institute (API) figures on Tuesday.
Gasoline inventories fell by 3.27
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