Oil prices fell for a second straight session after a short-lived rebound on Wednesday.
Drops in oil prices were driven by fears that more aggressive U.S. interest rate hikes would hit demand, while the market awaited further clarity on inventories.
Both Brent and WTI fell by more than 3 percent on Tuesday after comments by U.S. Federal Reserve Chair Jerome Powell that the central bank would likely need to raise interest rates more than expected in response to recent strong data.
Analysts say that Fed Chair Powell’s comments spooked markets and sent risk assets, including commodities, sharply down.
There was a short rebound in oil earlier on Wednesday, before a reversal. It was likely due to short-sellers taking profit as nothing has changed fundamentally, analysts said.
A stronger dollar also capped a lid on oil prices. Powell’s comments had propelled the U.S. dollar, which typically trades inversely with oil, to hit a three-month high against a basket of currencies.
The dips in oil prices come as Saudi Arabia’s foreign minister said that OPEC+ oil production targets reflect the consensus of the group.
Prince Faisal bin Farhan said that judging by the current output policy, OPEC+ will not raise production this year.
“All decisions in OPEC and OPEC+ are made through very extensive dialogue between all the partners,” the foreign minister said.
“Every statement I see that is made on the record from all of the partners in OPEC+ reflects that consensus,” he added, referring to members of the Organization of the Petroleum Exporting Countries (OPEC) and others including Russia.
He restated the position of the Saudi Energy Minister who said, last month, the current OPEC+ deal on oil output would be locked in until the end of the year.
“We always say that we are committed to a stable market … (the Minister of Energy) feels the market doesn’t need any production changes until the end of the year,” Prince Faisal said.
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