Wednesday saw a little decline in oil prices as worries about a potential interest rate increase by the US Federal Reserve next week, following an unanticipated increase in consumer prices in August, outweighed support from a positive outlook for OPEC oil demand growth.
Brent crude futures slipped 38 cents, or 0.4%, to $92.79 a barrel by 0407 GMT.
US West Texas Intermediate crude was down 29 cents or 0.3%, trading at $87.02 per barrel.
A hotter-than-expected US inflation report released on Tuesday put pressure on prices and disappointed hopes that the Fed might slow the tightening of its monetary policy in the upcoming months. Inflation is still significantly higher than the US central bank’s target range of 2%, and Fed officials will meet next Tuesday and Wednesday.
According to Tina Teng, an analyst at CMC Markets, “a strong US currency and an expectation for another super-sized rate hike by the Fed weighed on confidence.”
On Wednesday, the dollar’s appreciation against the yen approached a 24-year high.
Since oil is typically priced in US dollars, a stronger dollar increases the cost of the commodity for owners of other currencies.
According to market sources citing American Petroleum Institute data on Wednesday, US crude stockpiles increased by around 6 million barrels for the week ending September 9.
