Oil prices fell for a third straight session on Wednesday as the dollar gained steam and investors braced for U.S inflation data, while global recession risks and tightening COVID 19 curbs in China triggered worries about fuel demand.
By 0410 GMT, crude futures fell 46 cents, or 0.5 per cent, to $93.83 a barrel. U.S. West Texas Intermediate crude fell 54 cents, or 0.6 per cent, to $88.81 a barrel.
Both benchmarks fell 2 per cent in the previous session.
The dollar went to a new 24 year high against the yen on Wednesday, due to concerns about inflation and the pace of U.S. rate hikes. A stronger dollar makes dollar-denominated commodities more expensive for holders of other currencies and weighs on oil and other risk assets.
Stephen Innes, managing partner at SPI Asset Management said in a note that while fundamentals are higher for oil and a rather hefty production cut OPEC backstop, any breakdown in risk assets may hurt oil prices until there is a bottom form in risk assets.
Innes added that a hot CPI and even a dreary U.S. earning season could negatively affect oil markets.
The consumer price report is due on Thursday.
The International Monetary Fund has cut its global growth forecast for 2023 and warned of the risk of a global recession.
The IMF also urged central banks to keep up with inflation even though investors worry that policymakers could cause a sharp economic downturn by raising borrowing costs too fast and too high.
The oil market is being pressured by tightening COVID 19 curbs in China, the world's second largest oil consumer.
Big Chinese cities including Shanghai and Shenzhen have ramped up COVID 19 testing and tightened restrictions after infections rose to their highest since August.
Chinese authorities are indicating that there won't be any relaxation in their COVID 19 policy, further worsening demand situation, according to analysts at ANZ Research.
The U.S. crude oil stocks were estimated to have risen by 1.8 million barrels in the week to October 7, after falling the previous two weeks, according to a preliminary Reuters poll on Tuesday.
The Inventories data was delayed by a day this week because of a holiday on Monday. Industry data from the American Petroleum Institute is due to be released on Wednesday at 4: 30 p.m. EDT 2030 GMT, while the U.S. Energy Information Administration will release its data at 11 a.m. EDT 1500 GMT on Thursday.