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Brent crude futures were down 97 cents, or 1%, at $95.62 a
barrel by 0826 GMT. U.S. West Texas Intermediate crude was at
$89.59 a barrel, down 91 cents or 1%.
Both benchmark contracts were headed for weekly losses of close
to 3%.
A strong dollar has made oil more expensive for holders of other
currencies, while Asian and European equities dropped. [MKTS/GLOB]
In a sign of easing oil supply tightness, the price gap between
prompt and second-month Brent futures narrowed by about $5 a
barrel from the end of July.
"Global recession and demand destruction are front and centre of
current concerns given weak data out of the U.S., euro zone and
China. Signs of slowing economic growth are pervasive and could
dent oil demand," PVM analysts said.
Giving a floor to prices, U.S. crude inventories fell sharply as
the nation exported a record 5 million barrels of oil a day in
the most recent week, with oil companies finding demand from
European nations looking to replace crude from Russia.
Haitham Al Ghais, the new secretary general of the Organization
of the Petroleum Exporting Countries, told Reuters he was
optimistic about oil demand into 2023.
OPEC is keen to ensure Russia remains part of the OPEC+ group,
Al Ghais said ahead of a Sept. 5 meeting.
Supplies could tighten again when European buyers start seeking
alternative supplies to replace Russian oil ahead of European
Union sanctions which take effect from Dec. 5.
"We calculate the EU will need to replace 1.2 million barrels
per day of seaborne Russian crude imports with crude from other
regions," consultancy FGE said in a note.
(Additional reporting by Florence Tan in Singapore and Yuka
Obayashi in Tokyo; Editing by Jan Harvey)
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