Oil prices fell on Thursday following three sessions of gains, after Federal Reserve Chair Jerome Powell highlighted banking sector credit risks for the world’s largest economy, while U.S. crude stocks rose more than expected.
Brent crude futures fell 66 cents, to $76.03 a barrel while U.S. West Texas Intermediate crude (WTI) dropped 74 cents, to $70.16.
Both crude benchmarks settled on Wednesday at their highest close since March 14 after the dollar slid to a six-week low.
The Fed raised interest rates by a quarter of a percentage point, while indicating that it was on the verge of pausing further increases in borrowing costs, amid recent turmoil in financial markets spurred by the collapse of two U.S. banks.
Powell said on Wednesday that banking industry stress could trigger a credit crunch, with “significant” implications for an economy that U.S. central bank officials projected would slow even more this year than previously thought.
Meanwhile, U.S. crude oil stockpiles rose unexpectedly last week to their highest in nearly two years, latest data from the Energy Information Administration (EIA) showed.
Crude inventories USOILC=ECI rose by 1.1 million barrels in the week to March 17 to 481.2 million barrels, the highest since May 2021. Analysts in a Reuters poll had expected a 1.6 million-barrel drop.