US benchmark West Texas Intermediate sank below $85 while the global Brent benchmark fell below $90. A dollar gauge reached an all-time high on Wednesday, offering a macro headwind at a time when the oil market is grappling with potential slowing demand in China.
With central banks jacking up rates to quell inflation, investors are concerned economies may be tipped into recession. In China, strict virus curbs are damping demand, with major regions from Chengdu to Shenzhen extending lockdowns or adopting movement controls.
Prices erased a gain driven by a decision by the Organization of Petroleum Exporting Countries and its allies on Monday to pare output. Reflecting the softness, Saudi Arabia reduced prices for customers in Asia and Europe for next month’s shipments.