Oil fell sharply on Wednesday after slumping in the previous session, weighed down by concerns about weak demand due to the state of the global economy and China's rising COVID cases.
Brent futures fell $2.39 to $79.71 a barrel, a 2.9% loss, by 1309 GMT. U.S. crude dropped $2.20, or 2.9%, to $74.73 per barrel.
Both benchmarks plunged more than 4% on Tuesday, with Brent suffering its biggest one-day loss in more than three months.
Worries about the state of the global economy are front and centre of traders’ minds and will remain so for the foreseeable future," PVM Oil analyst Stephen Brennock said.
The Chinese government also increased export quotas for refined oil products in the first batch for 2023, signalling expectations of poor domestic demand.
Top oil exporter Saudi Arabia may further cut the prices for its flagship Arab Light crude grade to Asia in February, after they were set at a 10-month low for this month, as concerns of oversupply continued to cloud the market. read more
The head of the International Monetary Fund warned that much of the global economy would see a tough year in 2023 as the main engines of global growth - the United States, Europe and China - were all experience weakening activity. read more
The Fed also raised interest rates by 50 basis points (bps) in December after four consecutive increases of 75 bps each. If the Fed intensifies its rate hikes, that could slow the economy and hamper fuel consumption
