(Bloomberg) -- Oil fell after signs the Federal Reserve may hold interest rates higher for longer spurred a selloff in equities.

West Texas Intermediate tumbled by 1.4% to settle below $78 after the release of the Fed minutes that showed officials’ hawkish stance on rate policy. Oil had pared losses earlier in the session as data showed gasoline demand rising and a smaller gain in US crude inventories than estimated by an industry group. The report also had bearish elements as stockpiles at the hub in Cushing, Oklahoma, rose to the highest in 10 months. 

While the inventory report helped crude recover from earlier losses, it’s likely not strong enough to change the broader trajectory of trading as “oil prices are stuck in a narrow range until the next catalyst,” said Rob Thummel, a portfolio manager at Tortoise Capital Advisors. 

Oil has remained within the nearly $5 range it has traded in this month.

Traders also treated the overall inventory buildup with some skepticism as the report’s adjustment factor, essentially its margin of error, rose to the highest since November. 

Multiple gauges are signaling weakness in the physical market. Brent’s prompt spread remains close to flipping into a bearish contango structure for the first time since January — an indication of plentiful supply relative to demand. Meanwhile, the Brent DFL — a measure of Dated Brent relative to futures — also recently turned negative. Genscape data also showed expanded inventories in Europe’s oil trading hub.

Global benchmark Brent is around 6% higher this year, supported by factors including OPEC+ supply cuts. Geopolitical risks also linger, with recent drone strikes on Russian refineries and an oil tanker hit by a missile in the Red Sea area. Prices have cooled since mid-April, though.

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(A previous version of this story corrected the reason for the decline in headline and first paragraph)

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