Oil holds losses on hawkish Fed despite surprise stockpile draw

​Oil held losses as a persistently hawkish tone from the Federal Reserve countered the first decline in U.S. crude inventories this year.

West Texas Intermediate traded below US$77 a barrel after sliding almost five per cent over the previous two sessions. Fed Chair Jerome Powell reiterated that the bank may take interest rates higher than anticipated, but said a decision hadn’t been made about the March meeting.

The remarks made during congressional testimony offset news of a surprise drop in U.S. crude stockpiles, with inventories falling by 1.69 million barrels last week, according to Energy Information Administration data on Wednesday.

“Oil prices continued to slide despite U.S. crude stocks drawing for the first time this year,” said Keshav Lohiya, founder of consultant Oilytics. “Yield-curve inversion continues to point towards an upcoming recession.”