Oil prices ease ahead of expected increases in crude oil inventory
Oil prices fell on Wednesday ahead of expected increases in US crude inventories as the global central banks' efforts to contain inflation, and product demand weakened.
Brent crude prices for September fell 37 cents, or 0.3%, to $106.98 at 0340 GMT, while West Texas Intermediate (WTI) crude for August fell 69 cents, or 0.7%, declining to $103.53 a barrel. The contract will expire later on Wednesday.
The more active September WTI contract was down 50 cents at $100.24 a barrel.
Oil prices have been in a skirmish between supply fears due to Western sanctions on Russia and pressure from central bankers on indicators that they will raise interest rates to fight inflation.
Both contracts settled about 1% higher on Tuesday on tight supplies globally which have also kept the prompt Brent inter-month spreads in wide backwardation at about $4.40 a barrel. Front-month prices are higher than those in future months in a backwardated market, indicating tight supplies.
On Friday, open interest on New York Mercantile Exchange futures fell to its lowest level since September 2015 as investors cut risky assets like commodities and fear the Federal Reserve will continue to raise US interest rates.
U.S. crude inventories increased by nearly 1.9 million barrels in the week ended July 15, according to market sources based on Tuesday's figures from the American Petroleum Institute (API).
Official weekly crude oil and fuel inventory data from the US Energy Information Administration (EIA) is expected to be released at 1530 GMT on Wednesday, with traders focused on demand.
US 3:2:1 and gasoline crack margins – refined profit margins – fell to their lowest levels since April on Tuesday, signaling weaker fuel demand.
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