Oil prices fell in early Asian trade on Wednesday after a U.S. industry group reported crude stocks rose more than expected last week and as investors reined in expectations for interest rate cuts by the U.S. Federal Reserve. Brent futures fell 29 cents, or 0.4%, to $82.48 when the market opened at 0000 GMT. U.S. West Texas Intermediate (WTI) crude futures fell 22 cents, or 0.3%, to $77.65 a barrel.
U.S. crude oil inventories rose 8.52 million barrels in the week ended Feb. 9, according to market sources citing American Petroleum Institute figures released late on Tuesday. The build was much bigger than the 2.6 million barrel increase that analysts polled by Reuters expected.
“The builds in crude oil were fairly bearish. However, this was offset by large product declines,” ING analysts said in a note, adding that the data probably was reflection of BP’s 435,000 barrels per day Whiting refinery outage. The API data showed gasoline inventories fell 7.23 million barrels and distillate stocks fell by 4.02 million barrels, both much larger declines than analysts expected.
Official data from the U.S. Energy Information Administration is due on Wednesday at 1530 GMT.Also weighing on the market, data on Tuesday showed U.S. consumer inflation stayed elevated last month. As a result, investors now expect Fed policymakers to wait longer before cutting interest rates, potentially dampening economic growth and oil demand.
With expectations of rate cuts pushed out, the dollar rose to a three-month peak. A stronger dollar typically weighs on demand for oil among buyers paying in other currencies.