July 20 (Reuters) – Oil prices fell as much as $2 a barrel on Wednesday, under pressure from the world central bank’s efforts to curb inflation and ahead of an expected build in U.S. crude inventories. Brent crude prices for September fell $1.68, or 1.56%, to $105.67 a barrel by 1352 GMT, while US West Texas Intermediate (WTI) crude for August fell $1.82, or one 1.75%, at $102.40. The contract expires on Wednesday.
Oil prices had been extremely volatile in the previous session, caught in a tug-of-war between supply fears caused by Western sanctions on Russia and expectations of economic weakness and reduced demand as central bankers They indicated that they will raise interest rates to combat inflation. read more
On Friday, open interest in futures on the New York Mercantile Exchange fell to its lowest level since September 2015 as concerns that the Federal Reserve will continue to raise US interest rates led to investors investors reduce exposure to risky assets.
Adding to the bearish sentiment, US crude stocks rose about 1.9 million barrels in the week ending July 15, market sources said on Tuesday, citing figures from the American Petroleum Institute. That was close to a 1.4 million-barrel increase forecast in a Reuters poll.
Official weekly crude oil and fuel oil inventory data from the US Energy Information Administration (EIA) is due on Wednesday at 1430 GMT, with traders eyeing implied demand. Meanwhile, Libya has resumed the export of crude oil from the port of Es Sider, the Oil Ministry said on Wednesday.
Analysts, however, expect Oil prices to continue to be supported by tight supply, while US shale oil production expands at a modest pace. Limited supplies have kept Brent above $105 a barrel and caused Brent month-on-month spreads to trail widely around $4.30 a barrel. In a retroactive market, the prices of the previous month are higher than those of future months.