Brent oil fell from its highest close in four weeks as the head of the U.S. central bank lined up behind raising interest rates further in the second half of the year, and traders looked ahead to key crude stockpile data.

The global benchmark fell below US$77 a barrel, dropping 1.2 per cent after settling at the highest since May 24 on Wednesday. Federal Reserve Chair Jerome Powell, who will deliver additional remarks on Thursday, warned yesterday that further rate hikes were likely warranted to quell inflation.

Adding further pressure was a failure to hold above Brent's 50-day moving average, a key technical level, which it pierced on Wednesday for the first time since late April. 

Official prints on U.S. crude stockpiles are due later after holdings at the key hub in Cushing, Oklahoma, hit a two-year high last week. Ahead of that, people familiar with data from the industry-funded American Petroleum Institute said its outlook pointed to a drop nationwide, but small rise at Cushing.

Prices have been largely rangebound since early May as pressure from higher interest rates and robust supplies vie with efforts by OPEC+ to support crude. Traders are now keenly focused on the outlook for the second half of the year, which could be tight even with sluggish Chinese growth, according to the International Energy Agency.

“Oil prices are trading in the high end of the range over the month,” said Jens Pedersen, senior analyst at Danske Bank AS. “The market is holding up fairly well despite overall negative risk sentiment”

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Prices:

• WTI for August delivery declined 1.2 per cent to US$71.66 a barrel at 10:27 a.m. in London.
• Brent for August settlement slipped 1.2 per cent to US$76.22 a barrel.