Oil Drifts Lower but Remains Near 2-Week Highs as Traders Weigh Mixed U.S. Crude Data

Oil prices drifted lower in early Asian trade on Thursday, but remained near two-week highs as traders weighed mixed reports on U.S. crude supplies and the prospect of more monetary policy from the Federal Reserve.

Brent oil futures dropped 0.25% to $76.93 a barrel, while West Texas Intermediate crude futures dropped 0.26% to $72.34 a barrel by 10.21 A.M. Bangkok time. Both contracts were trading near their highest levels in two weeks.

The markets continued to look to Fed Chair Jerome Powell’s speech before Congress for any clues on the future of interest rates.

On Wednesday, Powell told the House Financial Services Committee that interest rates will likely need to move higher because inflation is still “well above” where it should be. However, he did not say whether rates would rise in July.

A rate increase in July is still seen by the market at a higher than 70% probability. 

Meanwhile, the supply side saw a larger-than-expected loss in the U.S. oil stocks in the week ending June 16, according to data released by the American Petroleum Institute (API) on Wednesday, suggesting some strength in U.S. crude demand.

However, the API data also suggested that gas stocks likely increased for a third consecutive week, signaling that U.S. fuel demand remained restrained despite the beginning of the travel-heavy summer season.