2023.01.0419:49:00UTC+00Oil Futures Settle Sharply Lower On Recession Fears

Oil prices fell on Wednesday, extending recent losses, as worries about energy demand amid rising fears of a global recession continued to weigh on the commodity.

West Texas Intermediate Crude oil futures for February ended down $4.09 or about 5.3% at $72.84 a barrel, the lowest settlement in more than three weeks.

Brent crude futures were down $4.10 or almost 5% at $78.00 a barrel a little while ago.

China's decision to increase export of refined oil products has fueled concerns of weaker demand in the country.

Meanwhile, Japan has announced that it would tighten borders controls for travelers from China, in response to a surge in Covid cases among visitors.

Traders also took note of comments from former New York Federal Reserve President William Dudley, who said a recession in the U.S. is likely because of what the Fed has to do.

Traders are looking ahead to weekly inventory reports from the American Petroleum Institute (API) and U.S. Energy Information Administration (EIA). The API's report is due later today, while EIA's inventory data will be out Thursday morning.