Oil prices tumbled more than five percent Wednesday on worries about a demand hit as central banks shift monetary policies while wealthy governments move ahead with emergency crude stockpile releases.
Brent oil futures for June delivery fell 5.2 percent to $101.07 per barrel, while West Texas Intermediate for delivery in May slid 5.6 percent to $96.23 a barrel.
The pullback came as US Federal Reserve meeting minutes showed several officials at the central bank favoring a hike in interest rates by half a percentage point in the future to combat inflation.
Increased interest rates are seen as a potential drag on economic growth, crimping energy demand, analysts said.
Analysts also pointed to an announcement from the International Energy Agency outlining plans to release crude stockpiles in the wake of Russia’s invasion of Ukraine.
Data from the US Energy Information Administration also showed a surprise build in crude inventories.
“It seems that the concerns are a little bit of weakness in demand short term, which is raising concerns of some demand destruction, along with the Federal Reserve minutes today,” said Phil Flynn, analyst at the Price Futures Group.
The retreat in crude prices came as congressional Democrats pressed CEOs from ExxonMobil, Chevron and other oil giants on the reasons for spiking gasoline prices.
Oil executives rejected suggestions they had withheld supply to drive up prices and said they are in the process of increasing investments in response to higher commodity prices.