Both benchmarks posted their biggest daily percentage decline since March and hit shares of major oil and gas companies. Prices hit their lowest since late April.
“The market is tightening, but we’re still getting hammered and the only way to explain it is recession fear across all risk assets,” said Robert Yawger, director of energy futures at Mizuho. “You’re feeling the pressure.”
Oil futures sank along with natural gas, gasoline and equities, which often serve as a gauge of demand for crude, as investors worry about the possibility of an economic downturn as central banks around the world world are taking aggressive steps to limit inflation.
In the euro zone, data showed business growth across the bloc slowed further last month, and forward-looking indicators suggest the region could enter a slump this quarter as the cost-of-living crisis keeps wary consumers.
Supply concerns still linger, sending WTI and Brent higher initially in the session, due to the possible disruption of production in Norway, where offshore workers have gone on strike.
The strike is expected to reduce oil and gas production by 89,000 barrels of oil equivalent per day (boepd), of which gas production accounts for 27,500 boepd, according to Norwegian producer Equinor.