Oil prices dropped to a 12-week low in volatile trade on Wednesday, extending Tuesday’s heavy losses as growing fears of demand destruction from a global recession outweighed supply concerns.
Brent futures for September delivery fell $2.99, or 2.9%, to $99.78 a barrel by 10:57 a.m. EDT (1457 GMT), while U.S. West Texas Intermediate (WTI) crude fell $3.19, or 3.2%, to $96.31.
That puts WTI and Brent on track for their lowest closes since April 11, after Brent fell 9% and WTI fell 8% on Tuesday.
It also put both benchmarks in technically oversold territory with a relative strength index (RSI) below 30 for a second day in a row. If Brent closes at that level, it would be the first time it remains in oversold territory for two days since December 2021.
Investment bank Goldman Sachs said the oil sell-off was driven by growing recession fears.
Germany’s government borrowing costs fell to a five-week low as mounting concern about a darkening economic outlook drove investors into safe-haven debt.