Oil prices fell on Wednesday after U.S. government data showed lower demand for gasoline during the peak of the country’s summer season and as interest rate hikes by central banks to fight inflation fueled fears that the economy could slow down, reducing demand for energy.
Prices pared losses during the session after TC Energy said the Keystone pipeline, one of Canada’s main oil export arteries, was operating at reduced rates for a third day. Repairs continued at a third-party power facility in South Dakota, raising concerns about tighter supplies.
Brent crude prices for September fell 43 cents to $106.92 a barrel. US WTI crude for August dropped $1.96 to $102.26 a barrel. The WTI contract expires this Wednesday.
The more active September WTI contract closed at $99.88 a barrel, down $0.86.
US gasoline inventories rose by 3.5 million barrels last week, according to government data, far beating analysts’ forecasts in a Reuters poll for an increase of 71,000 barrels.
“Gasoline is the big concern here. You really don’t want to go back on gas in the middle of the summer,” said Robert Yawger, executive director of energy futures at Mizuho.
Americans were shocked in June when prices at pumps soared to a record high of more than $5 a gallon.
US crude inventories fell by 446,000 barrels last week, data showed, compared with analysts’ expectations for an increase of 1.4 million barrels.
Oil prices have been extremely volatile, caught in a tug of war between supply fears caused by Western sanctions on Russia and concerns that the fight against inflation could weaken the global economy and reduce demand.
Source: CNN Brasil
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