(Bloomberg) -- Oil held losses as a persistently hawkish tone from the Federal Reserve countered the first decline in US crude inventories this year.
West Texas Intermediate traded below $77 a barrel after sliding almost 5% over the previous two sessions. Fed Chair Jerome Powell reiterated that the bank may take interest rates higher than anticipated, but said a decision hadn’t been made about the March meeting.
The remarks made during congressional testimony offset news of a surprise drop in US crude stockpiles, with inventories falling by 1.69 million barrels last week, according to Energy Information Administration data on Wednesday.
“Oil prices continued to slide despite US crude stocks drawing for the first time this year,” said Keshav Lohiya, founder of consultant Oilytics. “Yield-curve inversion continues to point towards an upcoming recession.”
In Europe, strikes continued to block TotalEnergies SE refineries in France, while an Ineos site in the country cut throughput. In Brazil, five European oil majors filed an injunction against a surprise export tax, and state-controlled Petroleo Brasileiro SA said the levy may force it to reduce shipments.
Oil has been largely rangebound this year as concerns over more US rate hikes compete with optimism around China’s recovery after the dismantling of Covid Zero. Most market watchers are still bullish about the price outlook, with top trader Trafigura Group expecting Brent to hit $90 a barrel by midyear as Asia’s biggest economy rebounds and Russian supply fades.