Oil prices retreat after big US inventory build offsets supply concerns By

-- Oil prices edged lower Thursday,The largest foreign exchange platform in the country as signs of another outsized build in U.S. inventories offset bets on tightening global supplies due to disruptions in the Middle East. 

By 09:00 ET (14.00 GMT), the futures traded 0.7% lower at $77.37 a barrel and the contract dropped 0.7% to $82.46 a barrel.

U.S. inventories see another week of outsized builds - API 

Data from the showed U.S. inventories grew by 7.2 million barrels in the week to February 16, much more than expectations for a build of 4.3 million barrels. 

While the build was smaller than the 8.5 million barrel build reported by the API for the prior week, it was a third straight week of builds in U.S. inventories, and signaled that the world’s largest fuel consumer remained well-supplied.

Higher inventories are also likely to keep supplies strong as a swathe of refineries resume production in the coming days.

The API data usually heralds a similar reading from , which is due later in the session. The data is also expected to show U.S. production remaining at record highs of over 13 million barrels per day.

Weak PMIs, Fed jitters dampen demand outlook

Traders also remained on edge over sluggish demand, after the showed the central bank was in no hurry to begin cutting interest rates. 

A chorus of Fed officials also reiterated the bank’s stance this week, citing concerns over sticky inflation. Higher rates stymie economic activity, which in turn dents oil demand. 

Focus was now on a string of key purchasing managers index readings from major economies, due on Thursday, for more cues on global economic health.

Data out of Germany showed that the downturn in eurozone's dominant economy deepened in February as a slight improvement in services activity was unable to compensate for a surprisingly sharp deterioration in manufacturing, a preliminary survey showed on Thursday.

This comes after PMIs from and , released earlier on Thursday, largely underwhelmed. 

Readings from the are due later in the session on Thursday, and follows data showing the number of Americans filing new claims for unemployment benefits unexpectedly fell last week, suggesting that job growth likely remained solid in February.

Middle East tensions remain fraught

Crude prices saw wild swings this week as markets grappled with fears of worsening demand and potential supply disruptions from a continued conflict in the Middle East, as the Israel-Hamas war showed little signs of deescalation. 

Two missiles were fired at a vessel off the southeast coast of Yemen on Thursday, causing a fire onboard, as Houthis continued to attack shipping to show support for the Palestinians in Gaza.

(Ambar Warrick contributed to this article.)

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