Oil prices are falling Thursday on data about a significant increase in U.S. inventories and signals that the Federal Reserve (Fed) has not yet ended its cycle of monetary policy tightening, despite a break in the rate hike at its June meeting.
The U.S. central bank kept rates in the 5-5.25 percent annual range at the end of Wednesday’s two-day meeting. Median forecasts from Fed policymakers suggest the rate will be 5.6% by the end of 2023 and 4.6% by the end of 2024.
August Brent crude futures on London’s ICE Futures exchange are at $73.01 a barrel by 8:05 a.m. Thursday, down $0.19 (0.26%) from the previous session’s closing price. Those contracts fell $1.09 (1.5%) to $73.2 a barrel on Wednesday.
The price of WTI futures for July oil fell by $0.17 (0.25 percent) to $68.1 per barrel at electronic auctions of New York Mercantile Exchange (NYMEX) by that time. The contract value fell by $1.15 (1.7%) to $68.27 per barrel at the end of previous session.
The pressure on the market caused by an increase in stocks is exacerbated by risks of weakening demand as a result of Federal Reserve policies, said Mizuho Bank Ltd. Vishnu Varathan, cited by Market Watch.
U.S. commercial oil inventories rose 7.92 million barrels to 467.12 million last week, the Energy Department said Wednesday. Commodity gasoline reserves rose 2.11 million barrels and distillates rose 2.12 million barrels.
Stocks at the Cushing terminal, where Nymex-traded crude is stored, rose by 1.5 million barrels last week, to a two-year high.
