Brent, WTI Prices Drop

Oil dropped on Wednesday as the market weighed potential interest rate hikes from the US Federal Reserve that could slow growth and dampen oil consumption, offsetting falling US inventories and strong Chinese economic data.
Brent crude futures shed 35 cents, or 0.4%, to $84.42 a barrel. West Texas Intermediate US crude fell 33 cents, also 0.4%, to $80.53 a barrel, Reuters reported.
“The US central bank likely has one more interest rate rise in store to fight inflation,” Atlanta Fed President Raphael Bostic said on Tuesday.
Markets are pricing in an 86% chance the Fed raises rates by 25 basis points at its May policy meeting.
In Europe, European Central Bank officials are also wary of inflation and suggesting interest rates must keep rising.
Oil prices received a lift from an industry report showing US crude stocks fell about 2.68 million barrels in the week ended April 14, market participants citing American Petroleum Institute figures said on Tuesday. Inventories of gasoline and distillate also fell last week, the people said.
The official inventory report by the Energy Information Administration, the statistical arm of the US Department of Energy, is due to be released on Wednesday.