Oil prices slipped today and were near their lowest levels since February as concerns over a possible recession and a fall in fuel demand continued to rattle markets.
Brent crude fell 50 cents, or 0.5%, to $93.62 a barrel in early afternoon trade. US West Texas Intermediate crude was down 66 cents, or 0.8%, at $87.88.
Prices have come under pressure this week as the market has fretted over the impact of inflation on economic growth and demand, but signs of tight supply kept a floor under prices.
Recession worries have intensified since the Bank of England's warning yesterday of a drawn-out downturn after it raised interest rates by the most since 1995.
"If commodities are not pricing in an imminent economic recession, they might be preparing for a 'stagflation' era when the unemployment rate starts picking up and inflation stays high," said CMC Markets analyst Tina Teng.
The fall in prices comes despite relatively tight supplies, as indicated by lingering backwardation, a market structure by which prompt prices are higher than those in future months.
"Clearly, everyone is taking the threat of recession far more seriously as we're still seeing a very tight market and producers with no capacity to change that," said Craig Erlam, senior market analyst at Oanda.
The OPEC+ producer group agreed this week to raise its oil output goal by 100,000 barrels per day (bpd) in September.
But this was one of the smallest increases since such quotas were introduced in 1982, OPEC data shows.
Supply concerns are expected to ratchet up closer to winter, with European Union sanctions banning seaborne imports of Russian crude and oil products set to take effect on December 5.
"With the EU halting seaborne Russian imports, there is a key question of whether Middle Eastern producers will reroute their barrels to Europe to backfill the void," said RBC analyst Michael Tran.
"How this Russian oil sanctions policy shakes out will be one of the most consequential matters to watch for the remainder of the year," he added.