Oil prices slipped ahead of the US Federal Reserve (Fed) Chairman Jerome Powell’s speech today on the economic outlook, as markets remain cautious.
The international oil benchmark of Brent crude fell 0.1% to $71.67 per barrel at 09.42 a.m. local time (0642 GMT), down from the previous session's close of $71.75.
The US benchmark West Texas Intermediate also declined by 0.1% to $67.84 per barrel, compared to $67.90 at the prior session's close.
Inflation data from the US on Wednesday raised concerns that the Fed’s battle against inflation could take longer than expected, putting downward pressure on oil prices.
Key inflation indicators have raised questions about whether the Fed will proceed with a rate cut at its December meeting. A rise in inflation could prompt the central bank to pause its rate-cutting plans.
High interest rates are expected to strengthen the US dollar against other currencies, potentially curbing oil demand.
Market participants are closely watching Powell’s statements for clues on the Fed’s next moves, with money market futures pricing in an 83% probability of a 25 basis point rate cut next month.
Meanwhile, data from the American Petroleum Institute (API) showed a larger-than-expected drop in US crude oil stocks, limited further oil price declines.
API reported a decrease of 777,000 barrels in US commercial crude inventories last week, contrary to market expectations of a 1 million barrel increase, creating optimism regarding rising demand in the US and supporting oil prices.
The US Energy Information Administration is set to release its official inventory report during the day.
By Basak Erkalan
Anadolu Agency
energy@aa.com.tr