WTI crude futures fell below $77 per barrel, hitting a three-month low, due to demand concerns and rising US stockpiles. Strong PMI data dampened hopes for Fed rate cuts. Despite a surprise rise in crude inventories, high gasoline demand and the upcoming OPEC+ meeting offer some support.

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The unexpected build in inventories raised some concerns over sluggish U.S. oil demand, especially ahead of the upcoming Memorial Day holiday, which traditionally marks the beginning of the summer driving season. with regards to fuel consumption.

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Gasoline inventories, one of the products that crude is refined into, declined by about 945,000 barrels against expectations of a draw of 1.6M barrels while distillate stockpiles unexpectedly rose by 379,000 barrels, compared to expectations for a fall of 100,000 barrels.

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Traders were fearful that pressure from sticky inflation and high interest rates would limit the growth in demand over the coming months, with gasoline stockpiles also growing by 2.1 million barrels.

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The API data usually heralds a similar reading from official inventory data, which is due later on Wednesday.

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