Oil prices slid marginally on Wednesday, fuelled by a surprise build in US petroleum stocks and worries about US interest rate cuts next year as the international crude benchmark, Brent crude futures settled 2 cents higher at $72.83 a barrel and the US West Texas Intermediate (WTI) crude slipped 5 cents to $68.72.
Data from the Energy Information Administration (EIA) said US gasoline stocks rose by 3.3 million barrels in the week to 212.2 million barrels, indicating a decline in demand.
Crude stocks fell by 1.8 million barrels in the week ended November 22, the EIA added, countering the American Petroleum Institute (API) which said on Tuesday that oil inventories fell by 5.94 million barrels and fuel inventories rose last week.
Slowing fuel demand growth in top consumers the US and China have weighed heavily on oil prices this year, although supply curtailments from the Organisation of the Petroleum Exporting Countries and its allies, OPEC+ have limited the losses.
OPEC+ will meet on Sunday, December 1 and there is an increasing possibility that members have been discussing a further delay to a planned oil output hike that was due to start in January.
OPEC+ which produces about half of the world’s oil, had aimed to gradually ease production cuts through 2024 and 2025, but weaker global demand and rising output outside the group have cast doubt on that plan.
The market is also expecting the US Federal Reserve to lower borrowing costs by 25 basis points at its December 17-18 meeting.
However, there is also anticipation that the US central bank will leave rates unchanged at its meetings in January and March.
Slower-than-expected rate cuts would keep the cost of borrowing elevated, which could slow economic activity and dampen oil demand.
Prices drew support from concerns about supply eased after a ceasefire deal between Israel and Hezbollah brokered by the US and France.
The ceasefire started on Wednesday and helped ease concerns that the conflict could disrupt oil supplies from the top-producing Middle East region.
There is also an increased possibility that oil may not be exempted from the 25 per cent tariffs that incoming US President Donald Trump has threatened to impose on all products coming into the US from Mexico and Canada.
