WASHINGTON (dpa-AFX) - Oil prices fell to a 2-month low on Wednesday after data showed an unexpected rebound in crude oil inventories in the U.S. in the week ended May 17th. Concerns about the outlook for oil demand, and Fed interest rates weighed as well on oil prices.
The minutes from the Federal Reserve's latest monetary policy meeting suggest officials expect to maintain interest rates at current levels longer than previously thought.
West Texas Intermediate crude oil futures for July ended down by $1.09 or about 1.4% at $77.57 a barrel, the lowest settlement in more than two months.
Brent crude futures were down $1.12 or 1.47% at $81.66 a barrel a little while ago.
According to the data released by the Energy Information Administration (EIA), crude inventories in the U.S. increased by 1.8 million barrels last week, after falling by 2.5 million barrels in the previous week. Crude oil inventories were expected to drop by 3.1 million barrels in the week.
Despite the monthly increase, U.S. crude oil inventories remain about 3% below the five-year average for this time of year at 458.8 million barrels.
Distillate fuel inventories, which include heating oil and diesel, also crept up by 0.4 million last week but are about 7 percent below the five-year average for this time of year.
The EIA data also showed that gasoline stockpiles fell by 0.9 million barrels last week and are about 2% below the five-year average for this time of year.
The minutes of the April 30-May 1 meeting, released Wednesday afternoon, said participants highlighted disappointing readings on inflation over the first quarter and indicators pointing to strong economic momentum.
The participants subsequently assessed that it would take longer than previously anticipated for them to gain 'greater confidence' inflation is moving sustainably toward 2 percent.
Traders now await the meeting of the Organization of Petroleum Exporting Countries and allies, collectively known as OPEC+. The group is widely expected to extend its production cut of 2.2 million barrels per day into the third quarter or even further.
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