Petroleum prices fell on Wednesday on concerns about fuel demand and global economic growth before an expected big hike in interest rates by the U.S. Federal Reserve.
Brent crude futures for August were down $1.27, or 1%, at $119.90 U.S. a barrel, in volatile trading.
U.S. West Texas Intermediate crude for July fell $1.44, or 1.2%, to $117.49 a barrel.
Surging inflation has led investors and oil traders to brace for a big move by the Fed this week - a 75-basis-point increase, which would be the largest U.S. interest rate hike in 28 years.
The European Central Bank said on Wednesday it would hold a rare, unscheduled meeting on Wednesday to discuss turmoil in the bond markets.
Adding to demand woes, China’s latest COVID outbreak has raised fears of a new phase of lockdowns.
Higher oil prices and dimming economic forecasts would weigh on demand prospects, the International Energy Agency said.
But persistent concerns about tight supply meant oil prices were still holding near $120 a barrel.
The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, are struggling to reach their monthly crude production quotas, recently hit by a political crisis that has reduced Libya’s output.
U.S. crude and distillate inventories rose last week, while gasoline stockpiles fell, according to market sources citing American Petroleum Institute figures on Tuesday.
U.S. Department of Energy stock data is due on Wednesday.
