West Texas Intermediate futures edged lower near US$77 a barrel after posting the biggest one-day decline since early January. The remarks, made during a testimony before Congress, opened the door to the Fed lifting interest rates by half a percentage point at this month's meeting and weighed on equity markets on Wednesday.
Adding to the bearishness, OPEC Secretary-General Haitham Al-Ghais said that slowing oil consumption in Europe and the U.S. poses a concern, even as Asia experiences “phenomenal” growth. Citigroup Inc. said that global supply is ample and demand remains low.Brent for May lost 0.4 per cent to US$83, after falling 3.4 per cent on Tuesday.
Before the Powell-driven selloff, oil had been trading at the highest level since late January. Prices also eased after China this week set a cautious economic growth target for 2023, denting some of optimism about a major revival in demand from the world's biggest oil importer. “The most inverted U.S. yield curve in decades now signals an even bigger risk of a recession and with that weakening demand for fuel,” said Ole Hansen, head of commodities strategy at Saxo Bank. “Overall, I see crude oil thoroughly stuck with no clear direction for months now.”