Oil prices fell during trading on Wednesday, amid expectations that U.S. interest rate hikes could slow growth and cut oil consumption, which overshadowed the impact of strong Chinese economic data, but a decline in U.S. inventories led to smaller-than-expected losses.
By 15:49 GMT, Brent crude was down 1.2 percent at $83.67 a barrel, after trading at $82.40 during the session, while US West Texas Intermediate crude was down 1.5 percent at $79.52.
Federal Reserve Bank of Atlanta President Rafael Bostick said on Tuesday that the Federal Reserve may raise interest rates further to fight inflation.
Markets expect 86 percent of the Federal Reserve to raise interest rates by 25 basis points at its scheduled monetary policy meeting in May.
“Data released yesterday indicates that the acceleration of the Chinese economy is not encouraging higher energy prices,” said Stephen Brennock, oil analyst at PVM Oil, according to Reuters.
China’s economy, the biggest importer of crude oil, grew by a better-than-expected 4.5 percent in the first quarter, data showed, and the country’s oil refinery output rose to a record high in March.
Prices gained relative support after the U.S. Energy Information Administration reported that U.S. crude stocks fell by about 4.6 million barrels last week to 466 million barrels, beating analysts’ expectations.
Pressure on both benchmarks increased as Asian refiners continued to buy Russian crude in April. India and China have bought most of Russian oil so far in April, above the price set by the West at a maximum of $60, according to traders and Reuters calculations.
Meanwhile, Reuters cited trade and shipping industry sources as saying oil exports from major ports in western Russia rose to their highest level since 2019 in April, surpassing 2.4 million barrels a day, despite Moscow’s pledge to cut output.
Russian crude oil exports and shipments from the ports of Primorsk, Ust Luga and Novorossiysk in April will rise to 10 million tonnes from 9.7 million tonnes in March.
Russian Deputy Prime Minister Alexander Novak said on February 10 that Russia would cut output by 500,000 barrels a day in March, then pledged in early April to extend the output cuts through the end of the year.