NEW YORK: Oil prices fell nearly 1% on Wednesday, retreating for a third straight day on expectations that US interest rate cuts might be deferred due to sustained inflation, a move that could weaken oil demand.

Brent crude futures were down 78 cents, or 0.94%, at $82.10 a barrel, while US West Texas Intermediate crude (WTI) was down 74 cents, or 0.94%, to $78.92 at 11:53 a.m. EDT (1553 GMT). Both benchmarks settled about 1% lower on Tuesday.

Fed policymakers said on Tuesday the US central bank should wait several more months to ensure that inflation really is back on track toward its 2% target before cutting rates. Investors awaiting minutes from the Fed’s last policy meeting later on Wednesday.

“The Federal Open Market Committee (FOMC) minutes will be scrutinized for the Fed’s assessment of bumpy Q1 inflation and clues on the timing and extent of potential interest rate cuts in 2024,” ANZ analysts said in a report.

Lower interest rates reduce borrowing costs, freeing up funds that could boost economic growth and demand for oil. The US Energy Information Administration on Wednesday said US crude stocks rose by 1.8 million barrels during the week ended May 17. That compares with the 2.5-million barrel draw analysts forecast in a Reuters poll and the 2.48-million barrel rise shown in the data from the American Petroleum Institute (API), an industry group.

“The report was bearish, with a build in total petroleum inventories,” said UBS analyst Giovanni Staunovo. However, gasoline stocks, which fell more than expected, signaled strong implied demand and pared back some losses earlier in the day.

Crude markets have been pressured by weakening fundamentals, with OPEC+ likely extending production cuts at their June meeting to support prices, according to Ole Hansen, Saxo’s head of commodity strategy. Physical crude markets have been weakening.