Oil prices declined on Wednesday amid uncertainty over the US Federal Reserve's (Fed) interest rate outlook, following the release of inflation data and expectations of steady global supply.
International benchmark Brent crude decreased by around 0.17%, trading at $68.17 per barrel at 10.37 a.m. local time (0737 GMT), down from $68.29 at the previous session's close.
Similarly, US benchmark West Texas Intermediate (WTI) crude decreased by 0.16%, settling at $65.55 per barrel, compared to $65.66 in the prior session.
US consumer prices rose 0.3% in June from the previous month, in line with expectations, while the annual rate accelerated to 2.7%, exceeding forecasts. It marked the highest monthly increase since January and the strongest year-on-year rise since February.
Core consumer prices, which exclude food and energy, rose 0.2% in June from the previous month and 2.9% from a year earlier, both slightly below market expectations of 0.3% and 3%, respectively.
The inflation uptick tempered expectations for a Fed rate cut in September, although markets still anticipate two cuts by year-end.
High interest rates typically strengthen the US dollar, making oil more expensive for holders of other currencies and curbing demand.
Additionally, data showing a rise in crude oil production by the Organization of the Petroleum Exporting Countries (OPEC) eased supply concerns and added to the downward pressure on prices.
According to OPEC's monthly oil market report, the group's crude production rose by 220,000 barrels per day (bpd) in June to 27.02 million bpd.
Total output from the broader OPEC+ alliance, which includes non-OPEC producers, increased by 349,000 bpd to 41.56 million bpd.
In addition, OPEC maintained its forecast for global oil demand growth this year, projecting an increase of about 1.3 million bpd from last year to reach 105.13 million bpd.
Expectations of steady demand amid rising supply strengthened concerns over a potential market oversupply, further weighing on prices.
Meanwhile, the American Petroleum Institute reported a sharp rise in US crude inventories, with stocks increasing by 19.1 million barrels last week, compared to expectations for a 2 million-barrel decline.
The unexpected buildup fueled concerns over weakening demand in the world's largest oil consumer, adding to the downward pressure on prices.
The US Energy Information Administration is scheduled to release official inventory data later in the day.
By Handan Kazanci
Anadolu Agency
energy@aa.com.tr