Oil holds steady as weak demand concerns offset US crude stockpiles decline
Oil prices held steady Wednesday as concerns about weak demand offset industry data showing a larger-than-expected drop in US crude inventories.
Brent crude futures were down 5 cents, or 0.05%, to $104.35 a barrel at 0250 GMT. West Texas Intermediate (WTI) crude rose 9 cents, or 0.1%, to $95.07 a barrel. WTI had climbed about $1 earlier in the session.
While declines in inventories are expected to support oil prices, the recovery has been limited by concerns about potential weak demand and the White House has said that it will further release strategic reserves
In addition, the expectation that the US Federal Reserve will announce an aggressive rate hike on Wednesday weighed on the sentiment and limited the rise in oil prices.
On Tuesday, the American Petroleum Institute industry group (API) said that US crude oil inventories fell 4 million barrels last week. That was four times the drop analysts had expected in a poll. Also, the data showed that gasoline inventories fell by 1.1 million barrels, compared to expectations for an increase of 3.5 million barrels.
The U.S. government's Energy Information Administration (EIA) will release its weekly oil report later Wednesday.
The Biden administration said on Tuesday that it will sell an additional 20 million barrels of oil from the country's Strategic Petroleum Reserve, as part of a previously announced plan to calm oil prices rising with Russia's invasion of Ukraine.
The administration had said it would release a record 1 million barrels per day of oil per day for six months from the SPR in late March. The United States has sold 125 million barrels of the reserve, with approximately 70 million barrels delivered to buyers.
Meanwhile, the US Federal Reserve is expected to raise interest rates by 75 basis points later Wednesday.
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