NEW YORK: Oil prices dropped to a 12-week low in volatile trade on Wednesday, extending Tuesday’s heavy losses as growing fears of demand destruction from a global recession outweighed supply concerns.
Brent futures for September delivery fell $2.99, or 2.9 percent, to $99.78 a barrel by 10:57 a.m. EDT (1457 GMT), while US West Texas Intermediate crude fell $3.19, or 3.2 percent, to $96.31.
That puts WTI and Brent on track for their lowest closes since April 11, after Brent fell 9 percent and WTI fell 8 percent on Tuesday.
It also put both benchmarks in technically oversold territory with a relative strength index below 30 for a second day in a row. If Brent closes at that level, it would be the first time it remains in oversold territory for two days since December 2021.
Oil prices were also knocked down by a soaring US dollar , which rose to a near 20-year high against a basket of other currencies.
A stronger US dollar makes oil more expensive for holders of other currencies, which can curb demand.
In China, the world’s biggest oil importer, the market worried that new COVID-19 lockdowns could cut demand.
China’s crude oil imports from Russia, meanwhile, soared 55 percent from a year earlier to a record level in May. Russia displaced Saudi Arabia as the top supplier as refiners cashed in on discounted supplies amid sanctions on Moscow over its invasion of Ukraine.
Adding to downward pressure on oil prices, Equinor ASA said all oil and gas fields affected by a strike in Norway’s petroleum sector are expected to be back in full operation within a couple of days.