Oil Slips for Third Day on Likely ‘Higher for Longer’ US Sates 

Equinor's Johan Sverdrup oilfield platforms and accommodation jack-up rig Haven are pictured in the North Sea, Norway December 3, 2019. (Reuters)
Equinor's Johan Sverdrup oilfield platforms and accommodation jack-up rig Haven are pictured in the North Sea, Norway December 3, 2019. (Reuters)
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Oil Slips for Third Day on Likely ‘Higher for Longer’ US Sates 

Equinor's Johan Sverdrup oilfield platforms and accommodation jack-up rig Haven are pictured in the North Sea, Norway December 3, 2019. (Reuters)
Equinor's Johan Sverdrup oilfield platforms and accommodation jack-up rig Haven are pictured in the North Sea, Norway December 3, 2019. (Reuters)

Oil prices fell over 1% on Wednesday, retreating for a third straight day on expectations the Federal Reserve might keep US interest rates higher for longer due to sustained inflation, potentially impacting fuel use in the world's largest consumer.

The market also slipped as US crude oil and gasoline inventories rose last week, according to market sources citing American Petroleum Institute (API) figures on Tuesday. Analysts expected them to decline.

Brent crude futures were down $1.03, or 1.2%, to $81.85 a barrel, while US West Texas Intermediate crude (WTI) dropped $1.25, or 1.6%, to $77.41 as of 0802 GMT.

"The view on the fundamental outlook remains grim," said Tamas Varga of oil broker PVM, adding that "the timing of a Fed rate cut is ambivalent at best".

Oil settled about 1% lower on Tuesday.

Physical crude markets have been weakening and in another sign that concern of tight prompt supply is easing, the premium of Brent's first-month contract over the second, known as backwardation, is close to its lowest since January.

Fed policymakers said on Tuesday the US central bank should wait several more months to ensure that inflation really is back on track towards its 2% target before cutting interest rates.

Higher borrowing costs can slow economic growth and pressure oil demand.

Investors are awaiting minutes from the Fed's last policy meeting and, following the API data, the latest official US oil inventory figures from the Energy Information Administration (EIA) due later on Wednesday.

"The Federal Open Market Committee (FOMC) minutes will be scrutinized for Fed's assessment of bumpy Q1 inflation and clues on the timing and extent of potential interest rate cuts in 2024," ANZ analysts said in a report.

Inflation in Britain fell by less than expected in April and a key core measure barely dropped, figures showed on Wednesday, prompting investors to pull bets on a rate cut next month.



Britain Vows to Toughen Its Trade Defenses Under New Strategy

Shadow Secretary of State for Work and Pensions Jonathan Reynolds speaks during Britain's Labour Party annual conference, in Brighton, Britain, September 27, 2021. (Reuters)
Shadow Secretary of State for Work and Pensions Jonathan Reynolds speaks during Britain's Labour Party annual conference, in Brighton, Britain, September 27, 2021. (Reuters)
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Britain Vows to Toughen Its Trade Defenses Under New Strategy

Shadow Secretary of State for Work and Pensions Jonathan Reynolds speaks during Britain's Labour Party annual conference, in Brighton, Britain, September 27, 2021. (Reuters)
Shadow Secretary of State for Work and Pensions Jonathan Reynolds speaks during Britain's Labour Party annual conference, in Brighton, Britain, September 27, 2021. (Reuters)

Britain said it would toughen up its trade defenses to better protect industries amid a turbulent global outlook of trade wars and tariffs that has shaped its new trade strategy to be published on Thursday.

Britain is set to partially implement a deal to remove some of US President Donald Trump's tariffs, but acknowledged that its trade remedies system needed to be more "agile, assertive, and accountable to guard British businesses against global turbulence".

"The UK is an open trading nation, but we must reconcile this with a new geopolitical reality and work in our own national interest," Business and Trade Secretary Jonathan Reynolds said.

"Our trade strategy will sharpen our trade defense so we can ensure British businesses are protected from harm."

As part of the strategy, the government will reform the Trade Remedies Authority.

UK Steel has said that the TRA's current powers, under which it proposed to cap how much of certain kinds of steel could be imported, needed to be more robust, and welcomed the trade strategy as a "critical turning point".

Britain is aiming to remove US tariffs on steel imports under their agreement, although the implementation of the deal has not been finalized.

The government has stepped in to take control of British Steel, and other industries are also seeking support, with AB Foods extending its deadline for deciding the fate of its Vivergo bioethanol plant to Thursday in the hope of a support package.

The trade strategy is Britain's first since it has had an independent trade policy after leaving the European Union.

The previous Conservative government hailed the opportunities of Brexit as it pursued several free trade agreements.

While the Labor government, which came to power a year ago, has concluded free trade agreement talks with India and is making progress on another with the Gulf Cooperation Council, it said the new strategy would focus on quicker and more practical deals than the previous government did.