Oil fell for a second day as investors weighed the outlook for monetary policy and signs of near-term market weakness.

West Texas Intermediate futures fell toward USD 67 a barrel after closing 2.4 percent lower in the previous session. Benchmark crude prices have come under fresh pressure over the last two days and the market’s structure is also flashing renewed weakness. A slump in the global Brent benchmark means that it is now trading at a rare discount to oil from the Middle East, despite its higher quality.

The wider economic picture has also been mixed. The European Central Bank said on Tuesday that it probably won’t be able to end its cycle of interest-rate hikes any time soon, which will likely present headwinds for the demand outlook. In contrast, a flurry of fresh data showed unexpected strength in several areas of the US economy.

WTI is on track for its first back-to-back quarterly decline since 2019, due to a sluggish economic recovery from China and aggressive interest-rate hikes from the US Federal Reserve. Resilient Russian exports have added to the price pressures. Prices have been largely rangebound since early May, but have often swung rapidly within that range. 

“It’s not just macro, but fundamental weakness is being priced into the curves,” said Keshav Lohiya, founder of consultant Oilytics Ltd. “The confidence of the buy-the-dip crowd continues to get eroded away as the market brushes off any bullish catalysts.”

The American Petroleum Institute reported US crude stockpiles fell last week, but inventories at the key storage hub of Cushing rose, according to people familiar with the figures. Government data is due later Wednesday.