Investing.com — Oil prices edged lower on Wednesday as traders looked ahead to new crude inventory data for signs of picking up demand as the U.S. summer season gets underway.
At 2:30 PM ET (18:30 GMT), the price fell 0.8% to settle at $79.23 per barrel, before falling 0.7% to $83.60 per barrel.
Fresh US inventory data at your fingertips
The upcoming inventory data is expected to signal a pick-up in demand from the start of the US summer season, which usually marks at least two months of increased demand in the world’s largest fuel consumer. The American Petroleum Institute will release its inventory estimate later in the session.
Economists forecast crude oil fell 1.9 million barrels in the week ending May 22, although gasoline and distillate inventories are expected to rise from the previous week.
Still, optimism about the US has been tempered by repeated warnings from the Federal Reserve that interest rates may remain high for longer amid persistent inflation.
This boosted the , limiting any major upside potential for crude.
The focus this week is on key US figures, the Fed’s favorite inflation gauge. A series of Fed officials will speak this week, while a revised reading of first-quarter gross domestic product is also available.
OPEC+ is expected to maintain supply constraints
Traders are also betting the Organization of the Petroleum Exporting Countries will maintain ongoing production cuts at a meeting this weekend.
The group is currently cutting production by 5.86 million barrels per day (bpd), equivalent to about 5.7% of global demand, in an effort to balance a market hit by falling demand.
The cuts include 3.66 million barrels per day by OPEC+ members through the end of 2024, as well as another 2.2 million barrels per day of voluntary cuts by some members, mainly Saudi Arabia, set to expire at the end of June.
The move to forego an in-person meeting likely signals a “nothing to see” production decision until the end of the year, RBC Capital Markets analysts said in a May 28 note.
“We see no appetite at this point to add more barrels to the market and cause another price move to the downside. Current price levels are already causing several producers to take on additional debt and push back timelines for some high-profile projects,” RBC added.
(Ambar Warrick contributed to this article.)
