Oil dips as potential Fed rate hike overshadow falling stocks

Shafaq News / Oil drifted lower on Wednesday as the market weighed potential interest rate hikes from the Federal Reserve that could slow growth and dampen oil consumption, offsetting falling U.S. inventories and strong Chinese economic data.

Brent crude futures shed 7 cents to $84.70 a barrel at 0320 GMT. West Texas Intermediate U.S. crude was down 5 cents to $80.81 a barrel.

The U.S. Federal Reserve likely has one more interest rate rise in store to fight inflation, Atlanta Fed President Raphael Bostic said on Tuesday.

Markets are pricing an 86% chance the Fed raises rates by 25 basis points at the May meeting.

Prices had got a lift from an industry report showing that U.S. crude stocks fell by about 2.68 million barrels in the week ended April 14, according to market sources citing American Petroleum Institute figures on Tuesday. Inventories of gasoline and distillate also fell last week, the sources said.

The official inventory report by the Energy Information Administration, the statistical arm of the U.S. Department of Energy, is due at 1430 GMT on Wednesday.

(Reuters)