Crude futures fell in Asian trade on Thursday, adding to sharp losses the previous session after the Federal Reserve raised rates for the first time in nearly a decade and official figures showed a surprise build in US inventories.

West Texas Intermediate crude for January delivery, the front-month contract, was down 12 cents at $35.40 a barrel by 0248 GMT after finishing down nearly 5 per cent on Wednesday.

Brent crude for February delivery, the front-month contract from Thursday, fell 21 cents to $37.18. The global benchmark fell $1.34 to $37.39 the previous session.

“Last night’s inventory data from the US was clearly unsettling,’’ said Ric Spooner, chief market analyst at CMC Markets in Sydney.

“We are now seeing signs of the US dollar getting stronger in our time zone as well, following on from the Fed,’’ he said.

The dollar added almost 1 per cent to 98.812 against a basket of major currencies and looked set for another test of stiff resistance around the 100.00 mark.

Fed rate hike

The US Fed had hiked interest rates for the first time in nearly a decade on Wednesday, a sign it believes that the US economy had largely overcome the calamity that was the 2007-2009 financial crisis.

Higher US rates typically support the dollar, making oil and other commodities denominated in the greenback more expensive, undermining demand.

Crude inventories

US crude stocks increased last week as imports into the Gulf Coast rose, data from the Energy Information Administration (EIA) had showed on Wednesday, surprising analysts who expected inventories to decline.

The EIA data showed crude inventories rose 4.8 million barrels last week to near record highs, while analysts in a Reuters poll had forecast a drop of 1.4 million barrels.

Adding to the overall bearish global picture, OPEC producers see scant chance of a significant rise oil prices in 2016 as extra Iranian production could add to the ongoing glut and the prospect of voluntary output restraint remains remote.

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