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The Fed's fight to lower inflation "has a long way to go" Powell said on Wednesday in testimony prepared for delivery to the House Financial Services Committee. Providing some support for prices earlier, analysts polled by Reuters said they expected U.S. crude oil and product inventories to have declined last week. However, an expanded poll now predicts a small build in crude oil stockpiles. Official U.S. oil inventory data from the American Petroleum Institute will be released later on Wednesday and the Energy Information Administration's report will follow on Thursday. Price gains were also capped as British inflation defied expectations of a slowdown, data showed on Wednesday.

Persons: Jerome Powell, Brent, Powell, Price, Craig Erlam, Shariq Khan, Rowena Edwards, Katya Golubkova, Trixie Yap, Emelia Sithole, David Goodman, Chris Reese Organizations: . West Texas, Financial Services Committee, Analysts, Reuters, American Petroleum Institute, Energy, Bank of England, OANDA, Thomson Locations: BENGALURU, U.S

Brent crude futures fell $2.95, or 3.9%, to settle at $71.84 a barrel, their lowest since Dec. 2021. Goldman Sachs cut its oil price forecasts early on Sunday, citing higher-than-expected supplies later this year and through 2024. The bank's December crude price forecast now stands at $86 a barrel for Brent, down from $95, and at $81 a barrel for WTI, down from $89. "The Fed meeting and inflation pressures remain key issues for the market this week," said Rob Haworth, senior investment strategist at U.S. Bank Asset Management. Also weighing on investors' minds, oil demand recovery has been muted in China, the top importer of crude oil and refined products.

Persons: Brent, Goldman Sachs, Goldman capitulating, Matt Smith, Robert Yawger, Rob Haworth, Haworth, Yawger, WTI, Shariq Khan, Noah Browning, Florence Tan, Mohi Narayan, Emelia Sithole, Jason Neely, Paul Simao, Sharon Singleton, Deepa Babington, David Gregorio Our Organizations: U.S, Federal Reserve, Brent, West Texas, U.S . Federal Reserve, Bank Asset Management, of Petroleum, International Energy Agency, Saudi, Thomson Locations: BENGALURU, U.S, China

SummarySummary Companies WTI futures fall to lowest since May 4Goldman Sachs cuts price forecasts, sees Brent at $86 in Dec. Brent crude futures fell $2, or 2.7%, to $72.79 a barrel by 11:50 a.m. EDT (15:50 GMT), while West Texas Intermediate crude futures fell $2.16, or 3.1%, to $68.01 a barrel. Goldman Sachs cut its oil price forecasts on higher-than-expected supplies from Russia and Iran. Also weighing on investors' minds, demand growth is yet to materialize in China, the top importer of crude oil and refined products. There are definitely fears that these guys (OPEC and IEA) will cut their demand forecasts," Yawger said.

Persons: Goldman Sachs, Brent, Goldman capitulating, Matt Smith, Robert Yawger, Yawger, WTI, Shariq Khan, Noah Browning, Florence Tan, Mohi Narayan, Emelia Sithole, Jason Neely, Paul Simao, Sharon Singleton Organizations: Fed, U.S, Federal Reserve, Brent, West Texas, U.S . Federal Reserve, Organization of Petroleum, International Energy Agency, Thomson Locations: BENGALURU, Russia, Iran, U.S, China, Saudi Arabia

"The Saudi cut lifted prices slightly, and then the chatter of the potential return of Iranian barrels saw a large drop. Oil prices had risen early in the week, buoyed by Saudi Arabia's pledge over the weekend to cut more output on top of the cuts agreed earlier with the Organization of the Petroleum Exporting Countries and its allies. However, a rise in U.S. fuel stocks and weak Chinese export data have weighed on the markets. Some analysts expect oil prices to rise if the U.S. Federal Reserve pauses hiking interest rates at its next meeting over June 13-14. The Fed's decision may also influence Saudi Arabia's next move, analysts said.

Persons: Brent, Giovanni Staunovo, Saudi Arabia's, Rob Haworth, Craig Erlam, Shariq Khan, Shadia Nasralla, Yuka Obayashi, Marguerita Choy, Richard Chang Organizations: Saudi, Brent, U.S . West Texas, Organization of, Petroleum, Northern, U.S, Bank Asset Management, U.S . Federal, Thomson Locations: China, BENGALURU, U.S, Iran, Saudi, US

Brent crude futures rose $2.25, or 3.1%, to $74.85 a barrel by 11:50 a.m. EDT (1550 GMT) . U.S. Federal Reserve officials on Wednesday suggested interest rates could be steady this month and the House passed a bill suspending the government's debt ceiling, improving chances of averting a disastrous default. "The successful debt ceiling negotiations clears that minefield, but the overall demand outlook is still murky - the trucking space is doing poorly, for example," CFRA Research analyst Stewart Glickman said. The oil market is focusing on the June 4 meeting of OPEC+, the Organization of the Petroleum Exporting Countries and allies including Russia, which will discuss whether to cut oil production further. U.S. crude oil stockpiles rose unexpectedly last week, as imports jumped and strategic reserves dropped to their lowest since Sept. 1983, according to data from the Energy Information Administration.

Persons: Stewart Glickman, Peter McNally, Robert Yawger, Alex Lawler, Rowena Edwards, Arathy Somasekhar, Andrew Hayley, David Goodman, Kirsten Donovan, David Gregorio Our Organizations: Brent, . West Texas, U.S . Federal, Organization of, Petroleum, Reuters, Energy Information Administration, Thomson Locations: China, BENGALURU, Russia, Reuters OPEC, U.S, OPEC, London, Houston, Beijing

At least 300,000 barrels of oil equivalent per day (boepd) production was shut in last week in Alberta. Also supporting oil prices, the U.S. could start repurchasing oil for the Strategic Petroleum Reserve (SPR) after completing a congressionally mandated sale in June, Energy Secretary Jennifer Granholm told lawmakers on Thursday. Global crude supplies could also tighten in the second half as OPEC+ - the Organization of the Petroleum Exporting Countries and allies including Russia - plan additional output cuts. Fears of a slowdown in the global economy limited gains in oil prices. "If credit conditions ease over the coming months, allaying economic fears for the world's largest economy, oil prices could bounce back without assistance but it seems a little premature at this point," said OANDA analyst Craig Erlam.

U.S. consumer prices rose in April, potentially raising the likelihood that the Fed will maintain higher interest rates. Rising global interest rates have weighed on oil prices in recent months, with traders concerned about recession. The surprising U.S. crude inventory build, along with lower crude imports and April's softer export growth in China exacerbated worries about global oil demand. The decline in crude prices was, however, limited by a surge in U.S. gasoline demand ahead of the summer driving season. "We are forecasting that oil prices range from $75-95 during 2023 based on fundamental supply and demand and that oil will rally as we head into the summer driving season," Hatfield said.

In a possible sign of weakening demand, U.S. crude inventories rose by about 3 million barrels in the week ended May 5, the Energy Information Administration said. The surprising U.S. inventory build along with lower crude imports and April's softer export growth in China exacerbated worries about global oil demand. Rising global interest rates have stirred fears of an impending recession, putting more pressure on oil prices. However, a large draw in U.S. gasoline and distillate inventories provided some support for oil prices on Wednesday. "Further action by (OPEC+) or calmer conditions in U.S. banks could see oil prices bounce back once more."

China's manufacturing activity unexpectedly fell in April, official data showed on Sunday, the first contraction since December in the manufacturing purchasing managers' index. China is expected to be the biggest factor driving oil demand growth this year, he added. The U.S. Federal Reserve, which meets on May 2-3, is expected to increase interest rates by another 25 basis points. The U.S. dollar rose against a basket of currencies, making oil more expensive for other currency holders. Oil prices drew some support from U.S. manufacturing activity pulling off a three-year low in April, as new orders improved slightly and employment rebounded.

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