Oil prices declined as rising US crude inventories signaled weaker demand, while uncertainty over the Federal Reserve’s (Fed) monetary policy and the resolution of supply disruptions in Libya added to the downward pressure.
The international benchmark Brent crude decreased by 0.3%, trading at $76.31 per barrel at 9.58 a.m. local time (0658GMT), down from $76.55 at the close of the previous session.
The US benchmark West Texas Intermediate (WTI) fell by 0.3%, reaching $73.34 per barrel, compared to its prior session close of $73.60.
Oil prices declined due to the impact of data pointing to an increase in stocks in the US, the world's largest oil consuming country.
The American Petroleum Institute (API) predicted that US commercial crude oil stocks increased by 2.86 million barrels last week compared to the previous week. Market expectations were that stocks would increase by 3.70 million barrels. The increase in stocks signaled a weakening demand in the US, pushing oil prices down.
The US Energy Information Administration (EIA) will release official stock data later in the day.
Moreover, uncertainties regarding the monetary policy decisions to be taken by Fed on Wednesday continue to impact oil prices.
While the inflation-recession dilemma persists across the world, concerns that the steps to be taken by the US on trade might disrupt the fight against inflation in the country remain strong. These concerns are pulling oil prices down by supporting the predictions that the bank might delay interest rate cuts. Experts are certain that the Fed will leave its policy rate unchanged.
The pricing in the money markets also predicts that the bank might cut interest rates 3 times, the policy statement and Fed Chair Jerome Powell's verbal guidance are expected to give clues about the future monetary policy.
Meanwhile, the news flow regarding the resolution of supply concerns in Libya contributed to the downward price movements.
In a statement released by Libya's National Oil Corporation (NOC) on Tuesday, it was stated that export activity has returned to normal after talks with protesters demanding a halt in loading at one of the main oil ports. The statements eased the supply concerns of market players and contributed to the fall in prices.
A member of the Organization of the Petroleum Exporting Countries (OPEC), Libya ranks among the top 10 countries globally in proven oil reserves, with an estimated 48.4 billion barrels, according to OPEC data.
By Humeyra Ayaz
Anadolu Agency
energy@aa.com.tr