• WTI has dropped in the last two days 3% on speculations about future Federal Reserve rate hikes.
• US crude oil inventories dropped, putting a lid on WTI’s fall.
• WTI Price Analysis: Further downside is expected below $74.00.

Western Texas Intermediate (WTI), the US crude oil benchmark, falls 0.93% as Federal Reserve’s (Fed) Chair Jerome Powell’s two-day testify in the US Congress ended. The aftermath leaves the US Dollar (USD) gaining, US Treasury bond yields up, and speculations for a 50 bps rate hike at the Fed’s upcoming meeting looming. At the time of typing, WTI is trading at $76.44 PB.

Oil prices extended its losses based on hawkish commentary by Fed Chief Jerome Powell, who said that rates would peak higher than expected and at a faster pace if needed. The greenback appreciated sharply and jumped more than 1%, spurring WTI’s 3% fall.

US crude oil inventories fell 1.7 million last week, exceeding estimates for a 395K drop, according to the US Energy Information Administration (EIA) agency.

Oil demand is expected to increase based on China’s reopening. Barclays lowered its WTI forecast from $94.00 a barrel to $87.00. “(We) expect the continued recovery in civil aviation demand in China and neighboring countries, a stabilization in industrial activity, and slower non-OPEC supply growth to drive the oil market balance into a deficit later this year,” Barclays analysts added.

At a Houston meeting, oil officials discussed how tight the supply was. Angola’s oil and gas chief said OPEC did not have to raise production to compensate for Russia’s half-a-million-barrel-per-day reduction.