Oil prices fell below $100 per barrel in early Asian trading on Wednesday as US inventory data showed buildups in crude oil and refined products amid rising fears of a global economic slowdown.
Brent crude futures dropped 68 cents, or 0.7 per cent, to $98.81 a barrel. US West Texas Intermediate crude declined 72 cents, or 0.8 per cent, at $95.12, also the lowest in three months.
Investors have sold oil positions on worries that aggressive interest rate hikes to stem inflation will spur an economic downturn that will hit oil demand.
Prices fell by more than 7 per cent in the prior session amid volatile trading.
Renewed COVID-19 travel curbs in China also weighed on the market. Multiple cities in the world’s second-biggest economy have adopted fresh restrictions, from business shutdowns to broader lockdowns, in an effort to rein in new infections from a highly infectious subvariant of the virus.
Meanwhile US crude stocks rose by about 4.8 million barrels for the week ended July 8. Gasoline inventories rose by 3 million barrels, while distillate stocks rose by about 3.3 million barrels, according to market sources citing American Petroleum Institute figures on Tuesday.
On Tuesday the dollar index, which tracks the currency against a basket of six counterparts, also climbed earlier in the day to 108.56, its highest level since October 2002.
Oil is generally priced in US dollars, so a stronger greenback makes the commodity more expensive to holders of other currencies. Investors also tend to view the dollar as a safe haven during market volatility.
Read More: Oil Prices Below $100 Per Barrel, A Day After Crashing 7% On Demand Worries