Oil prices edged lower on Wednesday over falling demand in the U.S. after data revealed that U.S. crude stockpiles decreased by more than anticipated, while investors sought direction from key inflation data that will signal the Fed's next move.
International benchmark Brent crude traded at $76.88 per barrel at 09.57 a.m. local time (0657 GMT), a 0.72% decrease from the closing price of $77.44 a barrel in the previous trading session.
The American benchmark West Texas Intermediate (WTI) traded at the same time at $73.14 per barrel, down 0.77% from the previous session's close of $73.71 per barrel.
Fears of a drop in demand in the U.S., the world's largest oil-consuming country, fueled the price downturn after the American Petroleum Institute (API) announced late Tuesday its estimate of a rise in crude oil stockpiles.
Inventories rose to over 3.6 million barrels, relative to the market expectation of a draw of 1.6 million barrels.
A strong increase in inventory implies a fall in crude demand in the U.S., assuaging market concerns over falling demand.
The U.S. Energy Information Administration's (EIA) data on oil stocks will be announced later on Wednesday, and if the increase in stock levels is confirmed, prices are expected to further decline.
Investors are now awaiting key consumer inflation figures for April to be released later on Wednesday.
While consumer inflation rose 9.1% annually last June, the largest 12-month increase since November 1981, the Federal Reserve's aggressive monetary tightening and rapid interest rate increases substantially slowed down the figure to a 5% annual gain in March.
Further price hikes were also impeded by Canada's battle against wildfires in Alberta, where a state of emergency was declared on Saturday, halting 319,000 barrels per day of oil output, or nearly 3.7% of total demand.
