Oil hit a six-month low on Wednesday after a brief rally as concerns about the prospect of a global recession that would weaken demand overshadowed a report showing lower US crude and gasoline stocks.
Figures on Wednesday did little to improve the economic backdrop, showing British consumer price inflation jumped to 10.1 per cent in July, its highest since February 1982, intensifying a squeeze on households.
Brent crude fell as low as $91.51, the lowest since February, and by 0931 GMT was down 5 cents at $92.29. US West Texas Intermediate (WTI) crude fell 20 cents, or 0.2pc, to $86.33.
“The oil market is struggling to shake off recession fears, and there is little to suggest that this will change any time soon,” said Stephen Brennock of oil broker PVM.
Earlier, prices gained support from a report showing lower US crude and fuel stocks. Crude stocks fell about 448,000 barrels and gasoline by about 4.5 million barrels, said sources citing American Petroleum Institute figures on Tuesday.
Official inventory data from the Energy Information Administration is out at 1430 GMT.
Oil has soared in 2022, coming close to an all-time high of $147 in March after Russia's invasion of Ukraine exacerbated supply concerns. Prices have fallen since as those concerns were edged out by the prospect of recession.
“There are growing downside risks as a result of the growth outlook and ongoing uncertainty around Chinese Covid restrictions,” said Craig Erlam of brokerage Oanda.
An exodus of participants, especially hedge funds and speculators, has made daily price swings far greater than in previous years.
On the oil supply front, the market is awaiting developments from talks to revive Iran's 2015 nuclear deal with world powers, which could eventually lead to a boost in Iranian oil exports if a deal is reached.
The European Union and United States said on Tuesday they were studying Iran's response to what the EU has called its “final” proposal to save the deal.