Oil prices drop, traders concerned over fuel demand

Oil prices pulled back on Wednesday as traders remained concerned over the prospects of fuel demand.

The West Texas Intermediate for April delivery dropped 2.41 U.S. dollars, or 3.16 percent, to settle at 73.95 dollars a barrel on the New York Mercantile Exchange. Brent crude for April delivery lost 2.45 dollars, or 2.95 percent, to close at 80.6 dollars a barrel on the London ICE Futures Exchange.

“The oil market still has a recession obsession,” Phil Flynn, senior market analyst at The PRICE Futures Group, said Wednesday in a note.

“Oil prices have been held back on fears that rising interest rates will cause a recession and reduce demand,” he said.

The minutes from the Federal Reserve’s Jan. 31-Feb. 1 policy meeting released Wednesday showed that Fed officials remained concerned over inflation and supported further increases in the interest rates.

Traders also awaited data on U.S. fuel stockpiles as the U.S. Energy Information Administration will release its weekly petroleum status report on Thursday. Analysts polled by S&P Global Commodity Insights expect the report to show a climb of 1 million barrels in U.S. crude supplies for the week ending Feb. 17. ■

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