*
Both crude benchmarks end at lowest since Feb. 3
*
High inflation still a key factor in monetary policy -
U.S. Fed
*
U.S. crude inventories rise for ninth straight week - API
*
Gasoline futures slide about 4% as snowstorm hits U.S.
travel
(Adds API data)
By Shariq Khan
BENGALURU, Feb 22 (Reuters) - Oil prices fell by $2 per
barrel to their lowest in two weeks on Wednesday, as investors
became more concerned that recent data will prompt more
aggressive interest rate increases by central banks, pressuring
economic growth and fuel demand.
Brent crude futures settled $2.45, or 3%, lower at
$80.60 per barrel. West Texas Intermediate crude futures (WTI) dropped $2.41, or 3%, to end at $74.05 a barrel.
The settlement levels were the lowest for both benchmarks
since Feb. 3.
Minutes from the latest U.S. Federal Reserve meeting showed
a majority of Fed officials agreed the risks of high inflation
remained a "key factor" shaping monetary policy and warranted
continued rate hikes until it was controlled.
"While better U.S. economic data should mean better oil
demand, the concern is that this forces the Fed to overtighten
monetary policy to bring inflation under control," said UBS
analyst Giovanni Staunovo.
"This is also supporting the U.S. dollar, which is not of
help for oil."
The U.S. dollar Index gained for a second straight
session, making greenback-denominated oil more expensive for
holders of other currencies. Other U.S. economic reports, however, showed some troubling
signs for the world's biggest oil consumer. Sales of existing
homes fell in January to their lowest since October 2010.
U.S. crude stockpiles rose by 9.9 million barrels last week,
according to market sources citing American Petroleum Institute
figures on Wednesday. U.S. oil inventories have climbed every
week since mid-December, worrying investors about demand in the
country. A Reuters poll had forecast a 2.1 million barrels increase
in crude stockpiles last week. Official data from the Energy
Information Administration is due Thursday at 11:00 a.m. EST. The American Petroleum Institute, an industry group,
releases its inventory report at 4:30 p.m. ET (2130 GMT).
Demand for crude oil is seasonally lower with major U.S.
refineries deep in maintenance season, said Price Group analyst
Phil Flynn.
Some 1.44 million barrels per day of U.S. refining capacity
is expected to be offline in the week ending March 3, according
to research company IIR energy.
A massive snowstorm in the U.S. Northern Plains and Upper
Midwest has also hit fuel demand, with 3,500 flights delayed or
cancelled across the country so far, according to
FlightAware.com.
U.S. gasoline futures slid almost 4% to their lowest in two weeks. (Reporting by Shariq Khan, additional reporting by Rowena Edwards and Trixie Yap; Editing by Marguerita Choy, David Gregorio and Lincoln Feast.)
