Investing.com– Oil prices settled lower Thursday, as concerns over supply outstripping demand persist a day after a surprise build in inventories, but losses were kept in check by signs of cooling U.S. inflation.
At 14:30 ET (18:30 GMT), fell 0.2% to $78.62 a barrel and the fell 0.4% to $82.27 a barrel.
Weak PPI data keeps losses in check
Data released earlier Thursday showed that U.S. producer prices unexpectedly fell in May, with the dropping 0.2% last month after advancing by an unrevised 0.5% in April.
In the 12 months through May, the increased 2.2% after rising 2.3% in April.
This followed data, released on Wednesday, showing consumer prices unchanged in May for the first time in nearly two years.
The U.S. kept its benchmark overnight interest rate in the current 5.25%-5.50% range on Wednesday, with Fed officials cutting predictions of the number of cuts of 25 basis points likleu this year to one, from three in March, citing sticky inflation.
A cut in interest rates would likely stimulate economic activity in the U.S., boosting demand for crude in the world’s biggest consumer.
Supply surplus concerns build amid worries about growing outupt following surprise jump in US inventories
Analysts at Citi warned that prices could crash below $60 a barrel next year, pressured by a “substantial” supply surplus amid increased output in North America, Brazil and Guyana.
The bearish outlook comes a day after after U.S. government data showed on Wednesday showed that U.S. unexpectedly grew in the first week of June – by 3.7 million barrels, against expectations for a draw of 1.2 million barrels.
Outsized builds in and stockpiles also drove up concerns that fuel demand was not picking up with the summer season as expected.
(Peter Nurse, Ambar Warrick contributed to this article.)