Oil prices settled lower on Wednesday, with Brent crude futures dropping $2.14 (2%) to $105.63 a barrel and U.S. West Texas Intermediate futures falling $1.16 (1.14%) to $101.02 a barrel. Investors are increasingly worried about potential interest rate hikes by the U.S. Federal Reserve, as Boston Federal Reserve President Susan Collins indicated that rates may need to rise if inflation does not ease. This comes amid rising inflation pressures linked to the ongoing war with Iran, which has driven up fuel costs. U.S. producer prices saw their largest increase in four years in April, while consumer prices rose sharply for the second consecutive month, marking the largest annual inflation increase in nearly three years. Additionally, U.S. crude stocks fell by 4.3 million barrels, surpassing analysts' expectations of a 2.1-million-barrel draw. The market is also watching the high-stakes summit between President Trump and President Xi in Beijing, as China remains a significant buyer of Iranian oil despite sanctions. OPEC has revised its forecast for global oil demand growth downward, and the International Energy Agency noted that global oil supply will struggle to meet demand this year due to disruptions in Middle Eastern production.