By Georgina McCartney
HOUSTON (Reuters) -Oil prices rose marginally on Wednesday as the prospect of delays to U.S. interest rate cuts and a higher-than expected rise in U.S. crude stocks offset support from a potential extension to OPEC+ supply cuts.
Brent crude futures edged up 14 cents to $83.79 a barrel by 10:50 a.m. EST (1550 GMT). U.S. West Texas Intermediate futures (WTI) gained 6 cents to reach $78.93. Both benchmarks had fallen $1 in earlier trading.
The early dips in prices were due to profit-taking plus a combined response to a reported surge in U.S. crude stocks by the American Petroleum Institute this week and continuing hopes for a Gaza ceasefire deal in coming days, said Vandana Hari, founder of oil market analysis provider Vanda Insights.
U.S. crude inventories rose by 4.2 million barrels last week, surpassing expectations of a 2.74 million-barrel build, the U.S. Energy Information Administration (EIA) said on Wednesday.
Federal Reserve Governor Michelle Bowman had signaled on Tuesday that she was in no rush to cut U.S. interest rates, particularly given continuing inflation risks. Higher-for-longer rates could dampen economic growth and suppress demand for oil.
Due Thursday is the January U.S. personal consumption expenditures (PCE) price index, the Fed’s preferred measure of inflation and a key factor in rate decisions.
“The power of inflationary expectations must not be underestimated,” Tamas Varga of oil broker PVM said in a note on Wednesday. “In case tomorrow’s U.S. PCE reading comes in above expectations, a temporary top might have been found” for oil.
Brent and WTI futures rose more than $1 a barrel on Tuesday after Reuters reported that the Organization of the Petroleum Exporting Countries and allies led by Russia (OPEC+) will consider extending voluntary oil output cuts into the second quarter.
Analysts at ANZ Research said that such a move by OPEC+ would be likely to tighten the market.
Russian authorities on Tuesday announced a six-month ban on gasoline exports starting March 1 to compensate for rising demand from consumers and farmers and to allow for planned refinery maintenance.
(Reporting by Georgina McCartney in Houston, Paul Carsten in London, Mohi Narayan in New Delhi and Andrew Hayley in BeijingEditing by David Goodman, Nick Macfie and Jonathan Oatis)
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