Oil prices dip on signs of massive US inventory build, hot CPI data
Investing.com-- Oil prices fell in Asian trade on Wednesday after industry data pointed to an outsized build in U.S. crude inventories, while markets were also reeling from a hot inflation reading that further dented bets on early rate cuts by the Federal Reserve.
Still, bigger declines in crude were held back by persistent geopolitical tensions in the Middle East and Russia, while U.S. fuel supplies also remained tight as local refineries remained shut for maintenance.
Iranian media reported an explosion and a fire at a key gas pipeline in Borujen County, although the cause of the explosion remained unclear.
Oil prices were due for some profit-taking following a strong run-up over the past two weeks, after Israel rejected a Hamas ceasefire proposal, and Ukraine launched strikes against several key Russian fuel export terminals.
Brent oil futures expiring in April fell 0.5% to $82.36 a barrel, while West Texas Intermediate crude futures fell 0.5% to $77.20 a barrel by 20:27 ET (01:27 GMT). Both contracts remained in sight of a two-week high.
Strength in the dollar also weighed on oil prices. The greenback shot up to a three-month high after data on Tuesday showed U.S. consumer price index (CPI) inflation remained sticky in January.
Sticky inflation gives the Fed more cause to keep interest rates higher for longer- a trend that is expected to stymie economic activity and potentially curb oil demand in the coming months.
Still, the Organization of Petroleum Exporting Countries (OPEC) kept its outlook for global crude demand unchanged in a monthly report released on Tuesday. But the report also showed that only some of its members fully committed to new production cuts, indicating that oil supplies were likely to be
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