WASHINGTON (DTN) -- Oil futures nearest delivery on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange slipped in early morning trade Wednesday as concerns over slowing global economic growth outweighed the prospects of tightening oil supplies, with U.S. inventories remaining in a de-stocking pattern for nearly two months and talks on production increases among members of Organization of the Petroleum Exporting Countries and Russia-led partners stalled.
Near 8:45 a.m. EDT, NYMEX West Texas Intermediate August futures traded marginally lower near $75.14 barrel (bbl), and international Brent crude benchmark for September delivery remained little changed near $76.47 bbl. NYMEX August ULSD futures declined 0.84 cents to near $2.1768 gallon and front-month RBOB futures slipped from the highest settlement since September 2014 at $2.3183 gallon.
The American Petroleum Institute reported late afternoon Tuesday that U.S. commercial crude oil inventories declined for an eighth consecutive week through July 9, falling by 4.079 million bbl compared with calls for inventories to decline by 4 million bbl, while stocks at the Cushing, Oklahoma, hub dropped 1.585 million bbl. Gasoline stockpiles fell 1.545 million bbl as of July 9, slightly below expectations for a 1.8 million bbl draw. API data also showed distillate inventories rose 3.699 million bbl, more than three times the expected 900,000 bbl build.
Markets remain on edge amid unconfirmed reports that Saudi Arabia has reached an agreement with the United Arab Emirates to ease OPEC+ production quotas until the end of the year, agreeing to raise the Abu Dhabi production baseline to 2018 levels. Disagreement between the two Gulf OPEC allies over production quotas blocked OPEC+ alliance to release an additional 400,000 bpd of crude oil supplies a month through the end of the year after Abu Dhabi requested a review of its production baseline. Wire services report that UAE has been considering increasing production outside of the OPEC+.
In outside markets, stocks on Wall Street opened mixed Wednesday as investors weighed a hotter-than-expected U.S. inflation reading for June and awaited testimony from Federal Reserve Chairman Jerome Powell on whether the central bank still believes rising price pressures will be transitory. The U.S. Consumer Price Index surged 0.9% in June, following a 0.6% gain in in the prior month and 0.9% surge in April, suggesting an acceleration in inflationary pressures across the U.S. economy as businesses struggle to balance a rush of demand against shortages of materials and labor. The fresh reading tests the Federal Reserve assumption that the recent surge in inflation is transitory and should fade over time as the reopening process is completed.
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