The price of crude %Oil is down more than 1% as data shows that U.S. stockpiles of the energy commodity have spiked in recent weeks.
The decline ends nearly a week of gains for crude oil prices that saw them rise nearly 4%.
Brent crude, the international standard, is down 1% and trading at $76.33 U.S. per barrel, while West Texas Intermediate (WTI) crude, the U.S. benchmark, is down 1.12% to $72.50 U.S. a barrel.
The drop comes as crude oil stockpiles in the U.S., the world’s biggest producer, rose by 9.4 million barrels in the week ended Feb. 7, according to American Petroleum Institute data.
At the same time, U.S. Federal Reserve Chair Jerome Powell said the central bank is in no rush to cut interest rates as the American economy remains strong and inflation elevated at 3%.
Higher interest rates increase the cost of borrowing, which can slow economic activity and dampen demand for energy products such as crude oil, say analysts.
The latest inflation report showed that consumer prices rose an annualized 3% in the U.S. during January, higher than expected and above the Fed’s 2% target.
The hot inflation reading lessens the likelihood that the U.S. central bank will lower interest rates anytime soon.
The U.S. Energy Information Administration (EIA) recently increased its estimate for U.S. crude production while leaving its demand forecast unchanged.
The agency now expects U.S. crude oil output to average 13.59 million barrels per day in 2025, up from its prior estimate of 13.55 million bpd.
Greater production and supply could further dampen crude prices going forward, warn analysts.
