Investing.com– Oil prices fell slightly in Asian trade on Wednesday, extending steep losses from the prior session amid lingering doubts over global demand, especially as data pointed to an unexpected build in U.S. inventories.
Some mild profit-taking also weighed on crude after strong gains in recent sessions, which were spurred by concerns over supply disruptions stemming from geopolitical ructions in Russia and the Middle East.
Brent oil futures expiring in August fell 0.1% to $84.90 a barrel, while West Texas Intermediate crude futures fell 0.1% to $80.78 a barrel by 20:32 ET (00:32 GMT).
Both contracts were still sitting on strong gains over the past two weeks, as persistent geopolitical tensions- Israeli strikes on Gaza and Ukrainian attacks on Russian refineries- kept traders pricing a risk premium into oil prices.
US inventories see unexpected build- API
Data from the American Petroleum Institute showed on Tuesday that U.S. oil inventories grew by about 0.9 million barrels (mb) in the week to June 21, against expectations for a draw of 3 mb.
The reading came after a 2.3 mb build in the prior week, and factored into fears that U.S. fuel demand remained sluggish despite the onset of the travel-heavy summer season.
The API data usually heralds a similar reading from official inventory data, which is due later on Wednesday.
Rate fears, dollar strength limits crude upside
While oil prices did mark strong gains in the past two weeks, their overall gains were still held back by concerns over high U.S. interest rates, which saw traders favor the dollar.
The greenback hovered near two-month highs as recent signs of resilience in the U.S. economy pushed up concerns that the Federal Reserve will have more headroom to keep rates high for longer.
Focus this week is largely on key PCE price index data, which is the Fed’s preferred inflation gauge and which is likely to drive the central bank’s outlook on rates.
A string of Fed officials also offered up hawkish warnings this week. The prospect of high for longer interest rates has been a key weight on oil prices, as traders fear that economic activity will cool in the coming months.
