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Investing.com--Oil prices fell Wednesday after industry data showed a build in US inventories, while caution over trade tariffs and a Federal Reserve meeting persist.
At 09:15 ET (14:15 GMT), Brent oil futures expiring in March dropped 0.6% to $76.05 a barrel, while West Texas Intermediate crude futures were 0.6% lower to $73.30 a barrel.
US inventories see first build in 10 weeks - API
Data from the American Petroleum Institute, released on Tuesday, indicated that US oil inventories grew by 2.86 million barrels in the week to Jan. 24.
US inventories saw nine straight weeks of draws, as cold weather pushed up demand for heating, while travel demand also increased during the year-end holidays.
While demand has remained steady in the world’s largest fuel consumer, traders are bracing for increased oil production under President Donald Trump, who last week declared a national energy emergency to ramp up output.
Official inventory data, from the Energy Information Administration, which is due later on Wednesday.
Trump tariffs, Fed meeting in focus
Crude prices have slipped almost 3% over the last week after the White House, on Tuesday, reiterated Trump’s threat of imposing trade tariffs against Canada, China, and Mexico by February 1.
Trump has threatened a 25% duty on imports from Mexico and Canada, and a 10% duty against China.
Tariffs against China are a particular point of concern for oil markets, given that they herald more economic pressure on the world’s biggest oil importer.
Chinese markets are closed for the week-long Lunar New Year holiday. But just before the holiday, purchasing managers index data released on Monday showed sustained weakness in Chinese business activity.
"WTI’s discount to Brent has narrowed to an average of US$3.6/bbl this year so far compared to an average of US$4.4/bbl for the full year 2024 as higher tariffs could make the oil supplies relatively tight in the US market," analysts at ING said, in a note.
Beyond Trump’s tariffs, focus is also on the conclusion of a Federal Reserve meeting on Wednesday, where the central bank is widely expected to keep interest rates steady but strike a hawkish chord.
The OPEC+ Joint Ministerial Monitoring Committee meeting next Monday will be another source of ambiguity in the worryingly unpredictable political and economic environment.
(Ambar Warrick contributed to this article.)
Crude prices were nursing some losses this week as traders fretted over weak Chinese economic data, as well as concerns that U.S. President Donald Trump’s plans for trade tariffs will stymie oil demand.
Oil was also pressured by Trump planning for increased energy production in the U.S., while the President also called on the Organization of Petroleum Exporting Countries to increase production and bring down oil prices.