Oil fell for a second-straight session as the first draw from U.S. crude inventories this year failed to turn trader confidence in crude amid the Federal Reserve’s persistent hawkish tone.

The U.S. inventory data from the Energy Information Administration briefly lifted futures, but the rally was extinguished by the dreary economic outlook sparked by the Fed looking at higher and faster rate hikes. West Texas Intermediate fell almost 2 per cent before recovering some of its losses, piling on the commodity’s biggest drop since early January in the prior session.

With fundamentals lacking any “uber bullish” trends and macro sentiment sour, no reasons to buy the dip have materialized, said Rebecca Babin, a senior energy trader at CIBC Private Wealth. 

Still, many major banks are projecting prices will turn, helped by rising demand in China and a coming seasonal shift that may draw down stockpiles, said Brian Kessens, a portfolio manager at Tortoise Capital Advisors.

“We expect refinery utilization to continue to tick higher and then people will start driving — as early as this week — for some spring break activity,” he said. “That will just continue as we get into the early summer.”

Prices:

• WTI for April delivery fell 92 cents to settle at US$76.66 a barrel in New York
• Brent for May delivery lost 63 cents to settle at US$82.66 a barrel.