Oil extended its longest run of losses this year after the Federal Reserve’s minutes showed officials back further rate hikes, adding to concerns that a US economic slowdown will reduce demand.

The minutes indicated that Federal Reserve officials were more concerned about the risk of inflation staying high than the economy entering a recession. West Texas Intermediate fell below US$74 a barrel — its sixth straight decline — shaking off increasing evidence of a robust recovery in Chinese demand following the end of COVID Zero rules.

“Crude remains trapped in a choppy trading pattern, with rising interest rates, and thoughts of a slowing economy keeping downside pressure,” said Dennis Kissler, senior vice president of trading at BOK Financial Securities.

Oil’s lackluster start to the year has defied early optimism that China’s resurgence would buoy prices. Morgan Stanley on Wednesday became the latest bank to trim price forecasts, projecting that the market will be oversupplied in the first quarter and balanced in the second quarter, before edging into a deficit in the second half.

In the Brent market, the nearest timespread fell sharply on Wednesday. That’s a tentative sign of a softer market, though traders often pare back positions in the days before expiry, which is due next week.

Prices:

• WTI for April delivery declined US$2.41 to settle at US$73.95 in New York
• Brent for April settlement fell US$2.45 to settle at US$80.60 a barrel