West Texas Intermediate crude futures fell $2.6, or 2.7 percent, to $103.46 a barrel by 0330 GMT. Brent crude futures fell $2.5, or 2.3 percent, to $109.22 a barrel.
The benchmark crude fell by as much as three dollars a barrel in early Asian trading, after it fell by about three percent in the previous session. Both are at their lowest levels since mid-May.
Investors continue to appreciate how worried they should be about the possibility of central banks driving the global economy into a recession as they try to curb inflation by raising interest rates.
Kazuhiko Saito, chief analyst at Fujitomi Securities, told Reuters that oil markets “remained under pressure as investors worried that a US interest rate hike would disrupt the economic recovery and weaken fuel demand.”
US Federal Reserve Chairman Jerome Powell said Wednesday that the bank is not trying to cause a recession as it tries to curb inflation, but is fully committed to keeping prices under control even if that raises the risk of recession.
“With more data coming out proving that Russian crude supplies are less affected by the sanctions than most people previously thought, the supply side may see a larger-than-expected increase in the near term,” analysts from Haitong Futures wrote.
Russian President Vladimir Putin said Wednesday that Russia is about to change the course of its trade and oil exports to countries from the BRICS group of emerging economies due to Western sanctions.
China’s imports of Russian crude oil in May rose 55 percent from a year earlier, setting a record.
Meanwhile, US President Joe Biden called on Congress to pass a three-month moratorium on the federal gasoline tax to help combat record-high prices at gas stations.
“The news boosted oil product prices temporarily, but it was later considered that even if the gasoline tax was suspended, retail prices would remain high, making it difficult to stimulate demand,” Fujitomi’s Saito said.
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