*
US consumer price index for April shows high inflation
*
US crude oil stocks build on SPR release, export drop -EIA
*
Drawdown in US fuel stocks limits oil price decline
(Updates with settlement prices)
By Shariq Khan
BENGALURU, May 10 (Reuters) - Oil prices fell by more
than a dollar a barrel on Wednesday, ending a three-day rally,
as economic data suggested that the U.S. Federal Reserve might
hike interest rates further.
Brent crude dropped $1.03, or 1.3%, to settle at
$76.41 a barrel while U.S. West Texas Intermediate crude (WTI) fell $1.15, or 1.6%, to $72.56 a barrel.
U.S. consumer prices rose in April, potentially raising the
likelihood that the Fed will maintain higher interest rates.
Rising global interest rates have weighed on oil prices in
recent months, with traders concerned about recession.
"Oil prices have been depressed by fears about economic
growth related to the banking crisis and normal seasonal
weakness during the spring as energy demand moderates," said Jay
Hatfield, CEO of Infrastructure Capital Management.
U.S. crude oil inventories rose by about 3 million barrels
last week due to another release from national reserves and a
drop in exports, the Energy Information Administration said.
The government report confirmed industry data released late
Tuesday that had reported an unexpected build, which weighed on
prices for most of Wednesday's session. [API/S}
Analysts polled by Reuters had forecast a crude drawdown of
900,000 barrels. The surprising U.S. crude inventory build, along with lower
crude imports and April's softer export growth in China
exacerbated worries about global oil demand.
The decline in crude prices was, however, limited by a surge in U.S. gasoline demand ahead of the summer driving season. U.S. gasoline inventories fell by 3.2 million barrels last week, much bigger than the 1.2 million-barrel draw forecast by analysts. Distillate stocks also declined, EIA data showed. RBOB gasoline futures rose 0.7% to $2.50 per gallon, while the ULSD futures contract was unchanged. "We are forecasting that oil prices range from $75-95 during 2023 based on fundamental supply and demand and that oil will rally as we head into the summer driving season," Hatfield said. (Reporting by Shariq Khan; Additional reporting by Noah Browning, Stephanie Kelly and Muyu Xu; Editing by Marguerita Choy, Kirsten Donovan and Alexander Smith)
