Amid concerns that sharp increases in US interest rates will harm demand
Oil prices stabilized in early Asian trading today, Wednesday, as industry data showed withdrawals from US crude oil inventories, after the market fell in the previous session amid fears that further sharp increases in US interest rates could hurt demand.
Brent crude futures for April were up 8 cents at $83.37 a barrel by 0120 GMT. US West Texas Intermediate crude futures lost 4 cents, to $77.54 a barrel.
In support of the market today, Wednesday, data from the American Petroleum Institute showed that US crude stocks fell by about 3.8 million barrels in the week ending March 3, according to market sources, quoting Archyde.com.
The decline contradicted expectations of 9 analysts polled by Archyde.com regarding an increase of 400,000 barrels in crude stocks.
Gasoline stocks increased by about 1.8 million barrels, while distillate stocks increased by about 1.9 million barrels, according to the sources, who asked not to be identified.
Both Brent and West Texas Intermediate fell more than 3% on Tuesday after US Federal Reserve Chairman Jerome Powell said the central bank would likely need to raise interest rates more than expected in response to the recent strong data.
“This has raised concerns about weak demand in the United States,” ANZ Research analysts said in a note to clients.
Powell’s comments pushed the dollar, which usually goes against oil, to a three-month high against a basket of currencies.