By Ambar Warrick
Investing.com-- Oil prices fell slightly on Wednesday as concerns over higher-than-expected U.S. CPI inflation data offset a strong demand forecast from the OPEC and signs that U.S. gasoline appetite remained robust.
London-traded Brent oil futures fell 0.3% to $93.23 a barrel, while U.S. West Texas Intermediate futures rose 0.1% to $87.39 a barrel by 20:59 ET (00:59 GMT). Both contracts slipped on Tuesday after stronger-than-expected U.S. inflation data boosted the dollar and triggered a sell-off in most asset classes.
But positive signals from the Organization of Petroleum Exporting Countries (OPEC) helped limit losses in oil prices.
The cartel said in a monthly report on Tuesday that it expects oil demand to grow steadily in 2022 and 2023, citing strength in major economies despite headwinds from rising inflation.
The OPEC maintained its forecast for the year, in that it expects oil demand to increase by 3.1 million barrels per day (bpd) in 2022, and by 2.7 million bpd in 2023.
In another positive sign for oil demand, data from the American Petroleum Institute showed that U.S. gasoline inventories continued to see a sustained drawdown in the week to Sept. 9, indicating that consumers were encouraged by a recent dip in fuel prices.
While overall U.S. crude stockpiles grew unexpectedly, a bulk of that increase was likely due to a drawdown from the Strategic Petroleum Reserve.
Oil prices have plummeted from peaks hit earlier this year, as investors feared that rising inflation and interest rates will severely impact crude demand. A series of COVID-related lockdowns in major importer China have also cast doubts over sustained crude demand this year.
Steadily rising interest rates may also trigger a recession in the U.S. economy, which is expected to dent demand. Tuesday’s CPI data now has markets penciling in a series of sharp interest rate hikes by the Fed this year, as it struggles to rein-in inflation.