Oil prices fell about 2 percent on Wednesday to their lowest level in a week as U.S. crude stockpiles far exceeded estimates and expectations for further interest rate hikes, although forecasts for stronger demand in 2023 capped losses, Reuters reported.

U.S. crude oil inventories rose by 16.3 million barrels last week to 471.4 million barrels, the highest level since June 2021, the U.S. Energy Information Administration (EIA) said.

That was much larger than the 1.2 million-barrel increase estimated by analysts in a Reuters poll and higher than the 10.5-million-barrel gain shown by data from the American Petroleum Institute (API), an industry trade body.

Brent crude futures were down $1.35, or 1.6%, at $84.23 a barrel, while U.S. West Texas Intermediate (WTI) crude was down $1.46, or 1 .9% to $77.60.

Both Brent and WTI closed at their lowest since February 7.

US inflation data and comments from central bank officials, seen as signs that interest rates will rise longer, also weighed on the market.

Federal Reserve officials said on Tuesday that the U.S. central bank would need to continue gradually raising interest rates to tackle inflation and suggested that price pressures from a tight labor market could push borrowing costs higher than expected.

Also weighing on prices was this week’s announcement that the United States would sell 26 million barrels of oil from the nation’s strategic reserves, already the lowest level in nearly four decades.

Stocks were somewhat supported by a report on Wednesday from the International Energy Agency (IEA), which raised its forecast for oil demand growth in 2023 and said limited OPEC+ production could lead to a supply cut in the second half of the year. OPEC+ includes the Organization of the Petroleum Exporting Countries (OPEC) and other oil suppliers, including Russia. (News.ro)