Prices had risen early on signs producers are cutting output as promised and on an expected demand increase as more countries ease lockdowns imposed to fight the pandemic. They fell after the Senate Banking Committee hearing began and Powell and Mnuchin faced sharp questions.
“The commentary puts a little pinch on the economic outlook and on the demand outlook,” said John Kilduff, a partner at Again Capital Management in New York.
Benchmark Brent crude was down 40 cents or 1.2% at $34.41 a barrel by 12:36 p.m. EST (1636 GMT).
The front-month contract for U.S. West Texas Intermediate crude, which expires on Tuesday, was down 13 cents a barrel, or 0.4%, at $31.69.
The July contract, trading at vastly higher volumes, was down 17 cents at $31.48 a barrel. Oil prices have risen in the past three weeks as states have rolled back lockdown provisions and global output has decreased.
Another drawdown in U.S. crude stockpiles in official weekly data to be released on Wednesday could support prices more, Kilduff said.