Oil Falls on Bearish US Data, Oil Inventories Rise By Reuters

by Ahmed Ghaddar

LONDON (Reuters) – Crude oil futures fell nearly 1% on Thursday, extending the previous day’s losses, as a surprise build in US crude inventories weighed on the market along with fears of a recession exacerbated by a disappointing US economy. data.

– By 1030 GMT, crude oil futures fell 65 cents, or 0.8%, to $84.33 a barrel, after falling to $83.76. US currency futures (WTI) fell 79 cents, or 1%, at $78.69, after losing as much as $78.13.

* “The larger-than-expected drop in US producer prices, lower retail sales, and a massive drop in manufacturing output last month have once again fueled concerns about the economic cost of raising interest rates (interest),” said Tamas Varga. Analyst at PVM Oil.

– US retail sales in December recorded their sharpest decline in a year, while manufacturing output fell by the most in nearly two years, as higher borrowing costs hit demand for goods.

* However, several Fed officials said rates need to rise above 5%, even as inflation shows signs of peaking and economic activity slows.

* In addition, data from the American Petroleum Institute showed that US crude inventories rose by about 7.6 million barrels in the week ending January 13, according to market sources.

– The median forecast in a Reuters poll among nine analysts was for a drop of about 600,000 barrels. The strong advance marked the second consecutive week of significant increases in inventories.

– The dollar rose due to the possibility of raising the interest rate significantly, which affected the demand for oil, as the rise in the dollar makes the commodity more expensive for holders of other currencies.

(Reporting by Sonali Paul in Melbourne and Emily Chow in Kuala Lumpur; Editing in Spanish by Carlos Serrano)