Oil prices fell on Wednesday on worries over fuel demand ahead of a US Federal Reserve meeting which is expected to see the central bank to hike rates by at least 75 basis points to combat inflation.

However, if the US Fed raises the benchmark rate by 75 bps, it would be the biggest hike seen since 1994.

In its monthly report, the Organization of the Petroleum Exporting Countries (OPEC) stuck to its forecast that world oil demand will exceed pre-pandemic levels in 2022. However, the Street believes that 2023 could be a weaker year. OPEC also said Russia's invasion of Ukraine and developments related to the coronavirus pandemic pose a considerable risk.

WTI crude futures fell 8 cents, or 0.1 percent, to $118.85 a barrel by 0008 GMT. Brent crude futures fell 26 cents, or 0.2 percent, to $120.91 a barrel.

Also Read: Oil prices slip ahead of expected US Federal interest rate hike

Metals too continued to extend decline. Gold is trading at a 4-week low holding above $1,800 per ounce, copper is trading at a 4-week low, aluminium is at a 6-month low and even the coal prices have come below $400 per tonne.

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(With input from Reuters)