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Oil prices eased on Wednesday off three-month highs as industry data showed a stock build in U.S. crude inventories and investors remained cautious ahead of a likely Fed rate hike.
Brent crude futures slipped 46 cents, or 0.55%, to $83.18 a barrel by 0451 GMT, while U.S. West Texas Intermediate (WTI) crude was at $79.18 a barrel, down 45 cents, or 0.57%.
U.S. crude stocks rose by about 1.32 million barrels in the week ended July 21, according to market sources citing American Petroleum Institute figures on Tuesday. Analysts polled by Reuters also expect a 2.3 million barrel drawdown.
U.S. government data on inventories is due on Wednesday.
“The market will continue to be in a tug-of-war between tightening global supply and fears of slowing demand due to global economic slowdown,” said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities, adding that investors had also squared their positions ahead of another expected interest rate increase by the U.S. Federal Reserve.
Investors are also cautious about the impact of the Fed decision on oil demand. The Fed meeting ends on Wednesday.
“Whilst the market is largely expecting the Fed to hike rates today, any signals that they still have more to do after this would likely put some pressure on risk assets,” said ING head commodities strategist Warren Patterson.
The Fed’s policy meeting started on Tuesday, with most market participants expecting the central bank to deliver a 25 basis-point rate hike when it concludes.
