Crude oil prices fall in early trade

10 May 2023 , 08:12 AM

The Federal Reserve’s next rate decision might be influenced by the United States’ April inflation data, which investors are waiting for. The early trade on Wednesday saw a decline in oil prices as industry data revealed an unexpected build in U.S. crude supplies.

Brent crude fell 16 cents to $77.28 per barrel, while WTI crude in the United States fell 20 cents to $73.51 per barrel, erasing gains from the previous session.

U.S. crude inventories increased by around 3.6 million barrels in the week ending May 5 while petrol stockpiles increased by 399,000 barrels, according to market sources cited by the American Petroleum Institute on Tuesday.

The results fell short of the 1.2 million-barrel drop in petrol stocks and the 900,000-barrel decline in crude inventories predicted by eight analysts surveyed by Reuters.

On Wednesday, U.S. government figures on oil inventories are due.

The market is also anticipating the U.S. consumer price index (CPI) data for April, which will be revealed on Wednesday.

Even if the U.S. central bank cut its forecast for future rate hikes, New York Fed President John Williams stated that inflation is still too high and that the bank will increase rates again if required.

Wildfires in Alberta, which is Canada’s largest oil-producing province, subsided on Tuesday as a result of lower temperatures. At least 319,000 barrels of oil equivalent per day (boepd), or 3.7% of the nation’s production, had to be shut in as a result of the wildfires.

Markets were also keeping an eye on Joe Biden, the vice president, and top Republican lawmakers as they discussed extending the $31.4 trillion debt ceiling because they believe that if Congress does not act within three weeks, there will be an unprecedented default.

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