Prices Weaken On Hawkish Fed & US Stock Build

Oil prices fell around a percent on Wednesday driven by a large EIA crude inventory build and signals of further Fed tightening. They rose 1.6% to reach a high during the European session but then began trending down prior to the Fed decision. It slumped on the hawkish projections and comments from Powell that upcoming meetings are live. The USD index is 0.3% lower.

• Brent fell 1.0% on the day to $73.58 after reaching an intraday high of $75.49 followed by a low of $73.03. It has held above $73 but is struggling to remain above $75. Support is at $71.50, the May 31 low. WTI fell 1.1% to $68.68 after a high of $70.49 and a low of $68.07. Support is $66.80 and it is struggling to sustain moves above $70.
• EIA crude stocks in the US rose 7.92mn barrels as refinery utilisation dropped sharply due to outages. Cushing inventories reached their highest since June 2021. Distillate rose 2.12mn and gasoline +2.11mn barrels.
• In its latest report, the IEA said that the oil market could tighten “significantly” over the coming months as demand from China recovers.