Oil futures drifted lower early Thursday after the U.S. benchmark ended the previous session at a roughly three-week low following data that showed a continued build in crude inventories.
West Texas Intermediate crude for March delivery
fell 29 cents, or 0.4%, to $76.12 a barrel on the New York Mercantile Exchange, after ending Wednesday at its lowest since Jan. 10.
April Brent crude
the global benchmark, fell 43 cents, or 0.5%, to $82.41 a barrel on ICE Futures Europe.
was flat at $2.453 a gallon, while March heating oil
fell 0.6% to $2.933 a gallon.
March natural gas
rose 1.2% to $2.497 per million British thermal units.
Crude prices struggled Thursday after data that showed U.S. inventories rose by 4.1 million barrels last week, far exceeding analyst estimates and marking the sixth straight weekly rise. Product inventories also rose.
Reports pointing to continued strength in Russian exports ahead of a price cap on Russian oil product exports that’s due to take effect on Feb. 5 have helped soothe supply worries, analysts said.
Crude failed to find a lift after the U.S. dollar sank and stocks rallied in the wake of Wednesday’s Federal Reserve decision. The central bank raised its policy interest rate by a quarter of a percentage point, as expected, but investors continued to bet on rate cuts by year-end in defiance of the central bank’s forecasts.
See: ‘Decidedly less hawkish’: 4 takeaways from Powell’s press conference as Fed hikes rates again
The ICE U.S. Dollar Index
a measure of the U.S. currency against a basket of six major rivals, was down 0.1% Thursday, trading at its lowest since April. A weaker dollar makes commodities priced in the currency cheaper to users of other currencies.
The Bank of England on Thursday raised interest rates by half a percentage point, and the European Central Bank was expected to deliver a half-point hike later Thursday.
Bullish demand-side factors “have lost some of their luster over the last week and still stubbornly hawkish central banks threaten the broader narrative that demand will be as strong as many initially hoped coming into the year,” said analysts at Sevens Report Research, in a note. “To that point, the fact that oil was unable to meaningfully bounce with stocks when the major indexes reversed higher [Wednesday afternoon] suggests more weakness may be in store for the oil market.”