Crude oil falls 1% as Fed caution, stocks build offset Opec+ expectations

Oil prices pulled back on Wednesday as the prospect of delays to U.S. interest rate cuts and a rise in U.S. crude stocks offset a boost from a potential extension to Opec+ supply curbs.

Brent crude futures fell 90 cents, or 1.08%, to $82.75 a barrel by 0902 GMT. U.S. West Texas Intermediate futures (WTI) were down 92 cents, or 1.17%, at $77.95.

Vandana Hari, founder of oil market analysis provider Vanda Insights, attributed the price falls to profit-taking plus a combined response to a surge in U.S. crude stocks and continuing hopes of Gaza ceasefire deal in the coming days.

Federal Reserve Governor Michelle Bowman had signalled on Tuesday that she was in no rush to cut U.S. interest rates, particularly given continuing inflation risks. Higher-for-longer rates could dampen economic growth and suppress demand for oil.

U.S. crude stocks, meanwhile, showed an 8.43 million barrel build in the week ended Feb. 23, according to market sources citing American Petroleum Institute (API) figures.

Gasoline inventories fell by 3.27 million barrels, and distillate stocks fell by 523,000 barrels, the data showed. [API/S]

Brent and WTO futures rose more than $1 a barrel on Tuesday after Reuters reported that the Organization of the Petroleum Exporting Countries and allies led by Russia (Opec+) will consider extending voluntary oil output cuts into the second quarter.

Last November Opec+ agreed to voluntary cuts totalling about 2.2 million barrels per day (bpd) for the first quarter of this year, led by Saudi Arabia rolling over its own voluntary cut.

Analysts at ANZ Research said that such a move by the Opec+ alliance would be likely to tighten the market.

Russian authorities on Tuesday announced a six-month ban on gasoline exports from March 1 to compensate for rising demand from consumers and farmers and to allow for planned refinery maintenance.