WASHINGTON (dpa-AFX) - Crude oil prices pared early gains and drifted lower on Wednesday as data showed a notable increase in U.S. crude inventory in the week ended June 9th.
Oil prices climbed higher earlier in the day as the dollar weakened as signs of moderating U.S. inflation reinforced bets the Federal Reserve would skip a rate hike, after ten consecutive rate hikes over the last fifteen months.
Positive industrial production data from eurozone and encouraging data on UK economic growth also helped lift oil prices earlier in the session.
The Fed today decided to maintain the target range for the federal funds rate at 5 to 5.25%, marking the first time the central bank has left rates unchanged since January 2022.
Leaving rates unchanged will allow the Federal Open Market Committee the opportunity to assess additional information and its implications for monetary policy, the Fed said.
The Fed noted future interest rate decisions will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.
However, the central bank's latest projections suggest the Fed plans to resume raising rates later this year, forecasting a rate of 5.6% by the end of 2023.
West Texas Intermediate Crude oil futures for July ended lower by $1.15 or about 1.7% at $68.27 a barrel.
Brent crude futures settled at $73.20 a barrel today, down $1.09 or about 1.5% from the previous close.
Data released by the Energy Information Administration (EIA) this morning showed crude inventories in the U.S. surged by 7.919 million barrels last week, substantially larger than the expected increase of abut 1.48 million barrels.
The EIA data also showed the gasoline stockpile rose by 2.108 million barrels last week, more than three times the expected increase of about 0.637 million barrels. Distillate stockpiles increased 2.123 million barrels, more than twice the expected increase.
Meanwhile, the International Energy Agency (IEA) has said global oil demand growth will taper off over the next few years as high prices and Russia's invasion of Ukraine speed up the transition away from fossil fuels.
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