BEIJING- Oil prices edged lower on Wednesday, weighed down by concerns over tepid demand and a stronger dollar even though escalating geopolitical tensions limited the losses.
The front-month March contract for Brent crude dipped 14 cents, or 0.1 percent , to $79.41 a barrel. US West Texas Intermediate crude ticked down 11 cents, or 0.2 percent , to $74.26 a barrel.
US crude stocks fell by 6.67 million barrels in the week ended Jan. 19, according to market sources citing American Petroleum Institute figures on Tuesday. Gasoline inventories, however, increased by 7.2 million barrels, stoking concerns over fuel demand in the world’s top oil consumer.
The Energy Information Administration (EIA), the statistical arm of the US Department of Energy, will release the data later on Wednesday.
A stronger US dollar also weighed on oil prices as demand from buyers in other currencies ebbs as they have to pay more for dollar-denominated oil.
The dollar index hovered near a six-week high against major peers on Wednesday as investors cemented expectations that the Federal Reserve would be in no rush to cut interest rates in the face of a resilient US economy.
“Without current geopolitical tensions, we believe crude would sell off meaningfully. Over time, we expect supply risk premiums to decouple from conflict risk, analogous to Russia-Ukraine,” said Vikas Dwivedi, global energy strategist at Macquarie, in a note.
