After two consecutive days of gains, futures on US West Texas Intermediate Crude Oil edged down on Thursday, as market players were still concerned about a possible recession in the United States and weaker fuel demand.
Crude Oil Futures gained more than 2% on Wednesday, as cooling consumer inflation in the US reinforced expectations the Federal Reserve would likely pause interest rate hikes.
Still, with interest rates at their highest level since 2007, investors were concerned that the Federal Reserve’s focus on bringing inflation down to its target might stifle US economic growth and future oil demand.
US CPI inflation edged up 0.1% in March, slowing down from a 0.4% surge in February, while market consensus had pointed to a 0.2% increase.
“Talks of a possible U.S. recession highlighted in the recent Fed minutes continue to bring the oil demand outlook into question, which is being negated by tighter supply conditions for now,” Yeap Jun Rong, market strategist at IG, was quoted as saying by Reuters.
Yesterday the market disregarded a small increase in US crude oil inventories, as they were attributed to a congressionally-mandated release of oil from the nation’s emergency reserve and lower exports at the beginning of April.
The latest data by the US Energy Information Administration showed that crude oil stocks had increased by 597,000 barrels last week, confounding market expectations of a 600,000-barrel decrease.
As of 8:28 GMT on Thursday WTI Crude Oil Futures were edging down 0.11% to trade at $83.17 per barrel. Yesterday the black liquid went up as high as $83.53 per barrel, which has been its strongest price level since November 17th 2022 ($85.45 per barrel).
At the same time, Brent Oil Futures were edging down 0.15% on the day to trade at $87.20 per barrel. Yesterday the commodity went up as high as $87.49 per barrel, which has been its strongest price level since January 27th ($88.95 per barrel).