Investing.com – Oil prices fell Wednesday on fresh signs of waning summer crude demand after weekly supplies fell much less than expected.
At 14:10 ET (18:10 GMT), fell 1% to $77.84 a barrel, while dropped 1% to $74.81 a barrel.
US inventories fall much less than expected
The reported Wednesday that crude stocks fell by 846,000 barrels in the week through Aug. 3, compared with a draw of 4.7M barrels seen in the prior week and expectations for a decline of 2.7M.
The small draw came just a day after showed U.S. oil inventories saw a draw of 3.4 million barrels in the week to August 23.
The data suggest that the travel-heavy summer season is nearing end, which could see some cooling in U.S. fuel demand.
Gasoline inventories, however, fell by 2.2M barrels for the period, compared with expectations for a 1.6M barrel decline, while distillates stocks unexpected rose by 275,000 compared with expectations or a draw of 1.1M barrels.
Refinery activity picked up slightly, rising to 93.3% of their capacity from 92.3% the prior week.
Dollar rebound adds further pressure
Crude oil prices were also weighed down by a rebound in the as investors have mostly priced in the prospect of U.S. rate cuts expected to begin next month.
As oil is priced in dollars, a rising greenback tends to hurt demand from non-dollar buyers.
The rebound in the dollar, however, expected to be short-lived as falling Treasury yields on expectations for rate cuts is likely to keep a lid on upside.
“Falling USD rates have made the greenback significantly cheaper to short and generalised dollar weakness is entirely consistent with Fed easing prospects being passed through to asset markets,” ING said in a recent note.
(Peter Nurse, Ambar Warrick contributed to this article.)