Around 1210 pm, the September Brent contract on the Intercontinental Exchange was at $99.41 per barrel, down 0.08% from previous close. The August contract of West Texas Intermediate was down 0.15% at $95.70 a barrel.
On Tuesday, Brent settled below the $100 per barrel mark for the first time in three months, falling 7%. Prices declined amid fresh lockdowns in several Chinese cities due to rising Covid-19 cases, analysts said. Fresh restrictions in one of the largest oil importing countries and recent rate hikes by several central banks have raised fears of a global recession.
Rise in crude stocks in the US also weighed on prices. US crude inventories rose about 4.8 million barrels for the week ended 8 July. Gasoline inventories increased 3 million barrels and distillate stocks rose by about 3.3 million barrels, according to data by American Petroleum Institute.
“Global benchmark Brent crude tumbled on strengthening dollar, fresh Covid-19 curbs in top crude importer China, and rising fears of a global economic slowdown. The American Petroleum Institute (API) reported a large build this week for crude oil of 4.762 million barrels, while analysts predicted a draw of 1.933 million barrels," said Rahul Kalantri, VP Commodities, Mehta Equities Ltd.
OPEC’s latest report forecasting a slowdown in oil demand by 2.7 million barrels per day in 2023 also weighed on prices, Kalantri said. “We expect crude oil prices to remain volatile in today’s session."
The fall in crude oil prices augurs well for India, as the country imports around 85% of its energy requirements.
Domestic retail prices of petrol and diesel have remained unchanged for nearly two months now. On Wednesday, petrol sold for ₹96.72 a litre in the national capital and diesel was priced at ₹89.62 a litre.
