Oil fell to the lowest since January on Wednesday as investors worried that a global recession will reduce demand in Europe and the U.S., just as China’s Covid Zero policy affects consumption in the world’s largest petroleum importer.
At 10:03 Thai local time, Brent crude futures dropped another $1.07, or 1.15%, to $91.76 per barrel, following a 3% drop in the prior session. U.S. West Texas Intermediate crude futures declined by $1.23, or 1.42%, to $85.65 a barrel.
Oil retraced some of its early Monday gains after OPEC and allies agreed to reduce output by 100,000 barrels per day in October.
“Fading the OPEC+ production cut bounce wasn’t that hard to do given a laundry list of global economic challenges,” said Edward Moya, a senior market analyst at OANDA, quoted by Reuters.
“Despite some better-than-expected U.S. services data, global growth isn’t looking good at all and that is trouble for crude prices.”