Oil falls for a third day on Middle East ceasefire hopes
Oil fell more than 1% on Wednesday, losing ground for a third straight session, sapped by the prospect of a ceasefire agreement in the Middle East and persistent U.S. inflation dampening the expected pace of interest rate cuts.
fell more than 1% on Wednesday, losing ground for a third straight session, sapped by the prospect of a ceasefire agreement in the and persistent U.S. dampening the expected pace of .Brent crude futures for July were down $1.19, or 1.4%, to $85.14 a barrel at 1255 GMT, having hit $84.78, their lowest since March 15.
U.S. West Texas Intermediate crude futures for June were down $1.24, or 1.5%, to $80.69, after touching their lowest since March 21.
Expectations that a ceasefire agreement between Israel and Hamas could be in sight have grown following a renewed push led by Egypt, even as Israeli Prime Minister has vowed to go ahead with a long-promised assault on Rafah.
"The crude market is weighed down by continued hopes for a ceasefire," said Ole Hansen of Saxo Bank. "In addition, stubborn U.S. inflation has further reduced rate cut expectations."
U.S. Federal Reserve officials are concluding their latest two-day policy meeting on Wednesday and are expected to hold interest rates steady. A rate cut would act as a boost to economic growth and fuel .
"Continued signs of inflation also raised concerns about demand for crude oil. This comes ahead of the U.S. driving season, where demand for rises strongly," ANZ analysts said in a report on Wednesday.
Further weighing on oil prices were separate reports that U.S. crude inventories rose and production increased.
U.S. crude inventories rose 4.906 million barrels in the week ended April 26, according to market sources citing American Petroleum Institute figures, which defied expectations for a decline of 1.1 million barrels. [EIA/S]
Traders be waiting to see if official data from the Energy Information Administration (EIA) on Wednesday confirms the trend.
On Tuesday, the EIA said U.S. production saw its biggest monthly increase in about 3-1/2 years from January to February.
