U.S. crude oil inventories up: API

HOUSTON, June 22 (Xinhua) -- The American Petroleum Institute (API) on Wednesday reported an increase of 5.607 million barrels of crude oil in U.S. inventories for the week ending June 17.

Analysts had expected a drop of about 1.433 million barrels for this week.

The API reported an increase of 0.736 million barrels in the previous week.

U.S. Oil prices fell on Wednesday as demand worries returned to the market.

The West Texas Intermediate for August delivery lost 3.33 U.S. dollars, or 3 percent, to settle at 106.19 dollars a barrel on the New York Mercantile Exchange. Brent crude for August delivery decreased 2.91 dollars, or 2.5 percent, to close at 111.74 dollars a barrel on the London ICE Futures Exchange.

The pullback came as traders grew concerned that the central bank's aggressive steps to combat inflation would slow growth and hurt demand for fuel.

In his testimony to U.S. Congress on Wednesday, Federal Reserve Chair Jerome Powell said that the central bank is trying to bring inflation down without inflicting too much damage, but the Fed's aggressive rate hikes could tip the U.S. economy into recession.

Oil participants also waited for data on U.S. fuel inventory as the Energy Information Administration is set to release its weekly petroleum status report on Thursday.