Oil eases on uncertain demand, market eyes US inventory data

Oil eases on uncertain demand, market eyes US inventory data

Oil futures dipped on Thursday amid demand fears after the Federal Reserve chairman hinted at further interest rate hikes, while traders awaited official U.S. inventory data following an industry report that showed an unexpected draw in crude stocks.

Brent futures fell 20 cents, or 0.3%, to $76.92 a barrel at 0400 GMT, while U.S. West Texas Intermediate (WTI) crude futures were down 19 cents, or 0.3%, at $72.34.The benchmarks had gained a dollar a barrel in the previous session as U.S. corn and soybean prices raced to multi-month highs, raising expectations that crop shortfalls around the globe could lower biofuels blending and increase oil demand.

Oil prices held on to most of the previous session’s gains as the market kept a lookout for fresh drivers, including signs of Chinese demand optimism and the latest U.S. inventory data.”China’s economic rebound is still the focus of oil traders. More stimulus measures by the Chinese government could improve the oil demand outlook,” said Tina Teng, markets analyst at CMC, adding that data next week on Chinese factory activity could steer oil price moves.

Meanwhile, official inventory data from the U.S. Energy Information Administration is due later on Thursday. The report was delayed by a day following the Juneteenth public holiday on Monday. In a preliminary indicator, data from the American Petroleum Institute, an industry group, showed U.S. crude oil inventories fell by about 1.2 million barrels in the week ended June 16, defying analysts’ forecasts for a build of 300,000 barrels. However, oil prices could rise as muted increases in U.S. oil production and cuts by the OPEC+ producing-nations group will limit crude supply in the months ahead, an executive at U.S. shale producer EOG Resources said on Wednesday.