FX.co ★ Oil Extends Losses As Recession Worries Mount

Oil prices fell on Thursday to extend losses from the previous session on concerns that high inflation and rising interest rates will tip the U.S. economy into recession.

Brent crude futures for August delivery dropped 0.8 percent to $117.58 a barrel, while WTI crude futures for July settlement were down 0.7 percent at $114.53.

The downside remained capped somewhat by expectations of tight supply and peak summer demand.

A jumbo-sized interest rate hike from the Federal Reserve has stirred worries about a recession sometime in the next year.

After announcing a 75-basis point rate hike on Wednesday and leaving the door open for another rate increase of that magnitude in July, Fed Chair Jerome Powell said the central bank cannot control all the factors driving inflation.

Meanwhile, data released by the Energy Information Administration (EIA) on Wednesday showed oil inventories in the U.S. rose by 2 million barrels last week to 418.7 million barrels, against expectations for a 1.3 million-barrel drop.

Gasoline stockpiles dropped by 0.7 million barrels last week, against expectations for a 1.1 million-barrel rise, while distillate stockpiles rose by 0.7 million barrels, more than twice the expected increase.