By Shariq Khan
NEW YORK (Reuters) -Oil prices fell for a fourth straight session on Thursday, settling at multi-month lows as the prospect of longer U.S. yields raised concerns about demand growth in the biggest oil market in the world.
futures fell 54 cents, or 0.7%, to $81.36 a barrel, the lowest since January. U.S. West Texas Intermediate (WTI) crude futures fell 70 cents, or 0.9%, to $76.87 a barrel, a three-month low.
Data from S&P Global showed U.S. business activity accelerated this month, but manufacturers also reported a rise in prices for a range of commodities, suggesting goods inflation will pick up in coming months.
On Wednesday, minutes from the US Federal Reserve’s latest policy meeting showed that policymakers still doubt whether current interest rates are high enough to curb persistent inflation.
High interest rates raise the cost of borrowing, which can slow economic activity and dampen oil demand.
Inventories, which also weighed on the market, rose by 1.8 million barrels last week, compared with an estimated decline of 2.5 million barrels, according to the Energy Information Administration.
However, the EIA reported that U.S. gasoline demand was the highest since November, providing some support for energy markets ahead of the Memorial Day holiday weekend, which is considered the start of the U.S. summer driving season. U.S. gasoline consumption represents about 9% of global oil demand.
“It was a pretty good report for gasoline, everything pretty much went into the positive side of the ledger,” said Mizuho analyst Bob Yawger. “However, one report does not indicate a trend, so everyone will be looking to see if it can continue to perform in the future.”
Investors are also looking forward to the June 1 meeting of the Organization of the Petroleum Exporting Countries and its allies, together called OPEC+, where the group will set its production policy.
Russia said it exceeded its OPEC+ production quota in April for “technical reasons” and will soon present its plan to the OPEC Secretariat to compensate for the error, the Russian Energy Ministry said late on Wednesday.
Recent weakness in crude oil prices increases the likelihood that OPEC+ will maintain existing production cuts at least until the end of September, said Andrew Lipow, chairman of Houston-based Lipow Oil Associates.
