Oil Prices Fall as Rate Hike Concerns Come into Focus

By Laila Kearney

(Reuters) – Oil futures fell in early trading on Friday on the prospect of higher interest rates for longer in Asia and the United States, while falling U.S. crude inventories held back prices. fall.

Brent futures for August delivery fell 11 cents to $85.60 a barrel by 0013 GMT, while US crude fell 9 cents to $81.20 a barrel.

Japan’s core consumer prices last month rose 2.5% from a year earlier, data showed on Friday, rising from the previous month and keeping the country’s central bank on track to raise interest rates. In the next months.

U.S. data released on Thursday showed that the number of Americans filing new claims for unemployment benefits fell in the week ending June 14 as broader strength in the labor market persisted. Still-strong employment raised the prospect that the US Federal Reserve could keep rates higher for longer.

Higher interest rates typically weigh on economies and, in turn, oil demand.

Oil was supported by government data released on Thursday, which showed a draw in U.S. crude oil inventories by 2.5 million barrels in the week ended June 14, to 457.1 million barrels, the oil company said. Energy Information Administration, compared with analysts’ expectations in a Reuters poll of 2.2 million barrels. draw of one million barrels.

Gasoline inventories fell by 2.3 million barrels to 231.2 million barrels, the EIA said, compared with forecasts for a rise of 600,000 barrels.​

“Gasoline has finally come to life and released its first strong report of the summer season,” Bob Yawger, director of energy futures at Mizuho in New York, said in a note.

(Reporting by Laila Kearney in New York; Editing by Stephen Coates)