Oil prices slumped further on Wednesday due to a double whammy of an expected massive rise in US crude oil inventories and growing fears about further US interest rate hikes.
International benchmark Brent crude traded at $84.82 per barrel at 09.24 a.m. local time (0624 GMT), down 0.88% from the closing price of $85.58 a barrel in the previous trading session.
At the same time, American benchmark West Texas Intermediate (WTI) traded at $78.28 per barrel, a 0.98% drop after the previous session closed at $79.06 a barrel.
The American Petroleum Institute (API) announced late Tuesday its estimate of a rise of nearly 10.5 million barrels in US crude oil inventories relative to the market expectation of a 300,000-barrel increase.
The new projected massive increase in crude stocks raised investor concerns because it signaled falling crude demand in the US, the world's largest oil consumer, and weighed on oil prices.
Weak US demand fears grew further after consumer prices in the country rose 0.5% in January from the previous month, while the figure for December was revised to a 0.1% gain from a decline of the same magnitude.
Investors were concerned after disappointing inflation data that the Fed would not soon ease up on interest rate hikes in its fight against inflation.
Oil prices further came under pressure after US President Joe Biden on Monday announced a new plan to release oil from the country’s Strategic Petroleum Reserves (SPR), the world's largest supply of emergency crude oil.
The plan, which includes the sale of 26 million barrels, was also announced when the US reserves fell to their lowest level since 1983.
Source: Anadolu Agency