Oil slides despite large US inventory drawdown

Oil futures fell nearly one percent in American trade even as the dollar index declined for the first time in six sessions, following a spate of data from the US, the world's largest energy consumer, including the EIA inventory report, while the FOMC's two day policy meeting draws to an end in Washington.

As of 05:50 GMT, US West Texas Intermediate fell 0.63% to $56.78 a barrel from the opening of $57.14, while Brent futures due on February 15 slid 1.28% to $62.53 a barrel from the opening of $63.34, while the dollar index shed 0.25% to 93.86 from the opening of 94.10. 

US consumer prices rose 0.4% in November in line with expectations, up from 0.1% in October, while core prices, excluding food and fuel, rose 0.1%, missing expectations of 0.2%. 

On a yearly basis, consumer prices accelerated to 2.2% as expected from 2.0% in October, while core prices slowed down to 1.7% from 1.8%. 

Now markets look forward to US President Donald Trump's speech on tax reforms in the US Treasury Department in Washington, while the Federal Open Market Committee's last 2017 meeting draws to an end today, with policymakers expected to unveil their three-year forecasts for inflation, growth, unemployment, and interest rates, while also expected to hike rates by 25 basis points for the third time this year.

The Energy Information Administration released its report on US crude stocks, showing a deficit of 5.1 million barrels in the week ending December 8, adding to a 5.6M drop in the previous reading, while analysts expected a 3.6M decline, with total stocks now reaching 443 million barrels, remaining within the upward range on average in this time of year. 

Otherwise, gasoline stocks rose 5.7 million barrels, while distillate stocks, including heating fuel, fell 1.4 million barrels, remaining within the lower range on average in this time of year. 

A major pipeline in the North sea was closed, stopping 400 thousand bpd from being shifted to near Edinburgh, and buoying Brent futures in recent days before losing ground on profit-taking.