LONDON: Oil prices were broadly steady on Thursday, ahead of U.S. crude oil stockpiles data, inflation data and an OPEC+ meeting to decide on supply cuts through the rest of the week.
Brent futures were down 18 cents or 0.2% to $83.42 a barrel as of 1151 GMT, while U.S. West Texas Intermediate (WTI) crude fell 4 cents or 0.05% to $79.19.
Both benchmarks are headed for monthly losses, with Brent futures on track for a decline of more than 5% from last month, while WTI was poised for a slide of over 3%.
U.S. crude oil inventories fell last week, down 6.49 million barrels against analyst projections of a 1.9 million barrel draw, according to market sources citing American Petroleum Institute figures on Wednesday.
Data from the U.S. Energy Information Administration (EIA) is due later on Thursday.
Yet the healthier demand data wasn’t enough to bolster prices, said Yeap Jun Rong, market strategist at IG.
Oil prices ease on US gasoline demand worries, economic data
“The broader risk-off environment has translated to some downward pressures on oil prices, which overrides the larger-than-expected drawdown in U.S. crude inventories from the recent API data,” Yeap said.
Despite stronger U.S. crude appetite, global oil inventories rose throughout April due to soft fuel demand. That may strengthen the case for OPEC+ producers, which include the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, to keep supply cuts in place when they meet on June 2, OPEC+ delegates and analysts say.
“A greater driver for oil prices ahead may revolve around the upcoming OPEC+ meeting this weekend, which could see OPEC members extending their current production cuts potentially till the end of the third quarter to support prices,” Yeap added.
Investors are also keeping an eye on key inflation data, with the U.S. personal consumption expenditures index – the Fed’s preferred measure of inflation – and euro zone consumer prices due on Friday.
If inflation remains higher than policymakers’ hopes, central banks such as the Federal Reserve could keep interest rates higher for longer. Those expectations have already put pressure on oil markets, with Brent settling at its lowest in more than three months on May 23.
Higher borrowing costs tend to tie down funds and consumption, a negative for crude demand and prices. The Fed is now seen cutting rates in September at the earliest, compared to a June start that had been expected by markets at the beginning of the year.
U.S. economic activity continued to expand from early April through mid-May but firms grew more pessimistic about the future while inflation increased at a modest pace, a Fed survey showed.