Crude retreats after rising US inventories and concerns over rate hike

By Alex Lawler

LONDON, Feb 15 (Reuters) – Oil fell for the second day in a row on Wednesday as an industry report pointed to ample supply in the United States and the prospect of further interest rate hikes raised concerns about weakening fuel demand and economic prospects.

* U.S. crude inventories rose by 10.5 million barrels – more than expected – according to market sources citing figures from the American Petroleum Institute (API) ahead of the release of official data. Administration of Petroleum Energy Information (EIA) forthcoming published at 3:30 p.m. GMT.

* Brent crude futures were down $1.19, or 1.39%, at $84.40 a barrel at 10:07 GMT, while US West Texas Intermediate (WTI) crude was down $1.19, or 1.51%, to $77.87.

* U.S. inflation data and statements from central bank policymakers, which fueled investor fears of longer interest rate hikes, also weighed on the market.

* On Tuesday, Federal Reserve officials said the U.S. central bank will need to continue to gradually raise interest rates to beat inflation and suggested price pressures fueled by a boiling labor market could do raise loan costs more than previously thought.

* The U.S. announcement this week to sell 26 million barrels of oil from the country’s strategic reserve, already at its lowest level in about four decades, also eased pressure on crude oil.

* Tuesday’s report from the Organization of the Petroleum Exporting Countries, in which the group revised global oil demand growth upwards for the first time in months and slashed supply prospects for non-member countries from OPEC, aiming for a tighter market in 2023, also contributed. .

* The International Energy Agency, in its report on Wednesday, also raised its demand forecast for 2023.

(Additional reporting by Laila Kearney in New York and Muyu Xu in Singapore; Editing in Spanish by Ricardo Figueroa)