Oil prices fell further on Wednesday, after having fallen between 3.5 percent and 4 percent Tuesday on concerns that aggressive rate hikes may dent demand for fuel in the U.S.
The downside remained capped after industry data showed an unexpected draw in U.S. crude oil inventories.
Benchmark Brent crude futures slipped 0.4 percent to $82.98 a barrel, while WTI crude futures were down 0.4 percent at $77.26.
The dollar scaled multi-month highs against most other major currencies, weighing on commodity prices including oil.Risk aversion gripped financial markets after Federal Reserve Chair Jerome Powell told lawmakers the U.S. central bank would be prepared to reaccelerate the pace of rate hikes if the economy grows too quickly.
The Fed’s next monetary policy meeting is scheduled for March 21-22, with CME Group’s FedWatch Tool currently indicating a 70.5 percent chance of 50 basis point rate increase.
Meanwhile, weekly data from the American Petroleum Institute (API) showed U.S. crude inventories fell by about 3.8 million barrels in the week ended March 3.
However, there has been an almost equal amount in increase of gasoline and distillate inventories, which rose by 1.8 million barrels and 1.9 million barrels, respectively.
Market participants await crude inventory data from the U.S. Energy Information Administration later in the day for further direction.
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