Oil falls around 3% as investors eye U.S. Fed rate hikes | Reuters

Oil falls around 3% as investors eye U.S. Fed rate hikes | Reuters

Oil prices tumbled around 3% on Wednesday as investors worried that rate hikes by the Federal Reserve could push the U.S. economy into recession, dampening demand for fuel.

Brent crude futures fell $2.91, or 2.5%, to settle at $111.74 a barrel. The global benchmark hit a session low of $107.03, its lowest since May 19.

U.S. West Texas Intermediate (WTI) fell $3.33, or 3%, to settle at $106.19 a barrel. The session low was $101.53, its lowest since May 11.

Investors assessed on Wednesday how interest rate hikes designed to cool soaring inflation might stall an economic recovery. read more

Oil prices pared losses, however, during the session after Fed Chair Jerome Powell pledged an "overarching focus" on bringing down inflation and reiterated that ongoing increases in the central bank's policy rate would be appropriate, with the pace depending on the economic outlook.