Oil prices fall on worries of higher US interest rates

Oil prices eased for a fourth straight day on Thursday on worries that US borrowing costs could be hiked again if inflation surged, a move that could hurt oil demand.

Brent crude futures fell 27 cents, or 0.3%, to $81.63 a barrel at 0004 GMT. US West Texas Intermediate crude (WTI) futures were down 35 cents, or 0.5%, at $77.14.

Both benchmarks fell more than 1% on Wednesday.

Minutes released on Wednesday from the Federal Reserve's last policy meeting showed the US central bank's response to sticky inflation would "involve maintaining" its policy rate for now but also reflected discussion of possible further hikes.

"Various participants mentioned a willingness to tighten policy further should risks to inflation materialize in a way that such an action became appropriate," minutes of the Fed's meeting said.

Higher interest rates boost borrowing costs, crunching funds that could boost economic growth and oil demand.

Also weighing on the market, US crude stocks rose by 1.8 million barrels last week, according to the Energy Information Administration, compared with an estimate for a 2.5-million-barrel draw.

Globally, physical crude markets have more recently been pressured by soft refinery demand and ample supply.

Russia said it exceeded its OPEC+ production quota in April for "technical reasons" and will soon present to the Organization of the Petroleum Exporting Countries (OPEC) Secretariat its plan to compensate for the error, the Russian Energy Ministry said late on Wednesday.

Citi Research said it continues to expect that OPEC+, which groups together OPEC and allies led by Russia, will hold its production cuts through the third quarter of this year when it meets on June 1. Citi continues to see Brent averaging $86 a barrel in the second quarter of 2024.