Oil prices slipped in early trade on Wednesday after industry data showed a surprise build in US crude stocks, while investors awaited US inflation data for April that could give direction for the Federal Reserve’s next rate decision.
Brent crude dropped 16 cents to US$77.28 a barrel at 0008 GMT, while US West Texas Intermediate (WTI) crude dipped 20 cents to US$73.51, paring gains from the previous session.
In a possible sign of weakening demand, US crude inventories rose by about 3.6 million barrels in the week ended May 5, while gasoline stockpiles rose by 399,000 barrels, the American Petroleum Institute reported on Tuesday according to market sources.
The data defied expectations from eight analysts polled by Reuters for a 900,000-barrel drawdown in crude inventories and a 1.2 million-barrel drop in gasoline stocks.
US government data on oil inventories is due on Wednesday, according to Reuters.
At the same time, the market is awaiting US consumer price index (CPI) figures for April due to released on Wednesday.
New York Fed President John Williams said inflation remains too high and that the central bank will raise rates again if necessary, even though the US central bank dropped guidance about the need for future hikes.
In Alberta, Canada’s main oil-producing province, wildfires eased on Tuesday thanks to cooler weather. The wildfires forced oil and gas producers to shut in at least 319,000 barrels of oil equivalent per day (boepd), or 3.7% of the country’s production.
Markets were also monitoring US President Joe Biden and top Republican lawmakers’ comments on raising the US$31.4 trillion US debt ceiling, fearing an unprecedented default if Congress does not act in three weeks.
