On Tuesday, oil prices dropped about 2 per cent, extending the previous session’s almost 2 per cent decline, as recession fears and a flare-up in COVID-19 cases in China raised concerns over global demand.

On Monday, World Bank (WB) President David Malpass and International Monetary Fund (IMF) Managing Director Kristalina Georgieva warned of a growing risk of global recession and said inflation remains a continuing problem.

Brent crude was down USD 1.63, or 1.7 per cent, to USD 94.56 a barrel by 1335 GMT. US West Texas Intermediate crude fell USD 1.82, or 2 per cent, to USD 89.31. Oil had fallen sharply on economic fears after surging earlier in 2022 when Brent came close to its record high of USD 147 as Russia’s invasion of Ukraine added to supply concerns.

Apart from China’s rising Covid cases, oil also came under pressure from a strong dollar, which hit multi-year highs on worries about interest rate increases and escalation of the Ukraine war. A strong dollar only makes oil more expensive for buyers with other currencies and tends to weigh on risk appetite.

However, losses were limited by a tight market and last week’s decision by the Organization of the Petroleum Exporting Countries (OPEC) and allies, including Russia, together known as OPEC+, to lower their output target by 2 million barrels per day.