Oil prices hit nine-month lows on Monday before recovering some ground in choppy trade, as recession fears and a strong dollar spooked markets.
Brent crude futures for November settlement were down 37 cents, or 0.4%, at $85.78 a barrel, having fallen as far as $84.51, the lowest since Jan. 14.
US West Texas Intermediate (WTI) crude for November delivery dropped as far as $77.21, the lowest since Jan. 6, and was last down 23 cents, or 0.3%, at $78.51.
Both contracts slumped by about 5% on Friday.
The dollar index that measures the greenback against a basket of major currencies climbed to a 20-year high on Monday. A stronger dollar tends to curtail demand for dollar-denominated oil.
The impact of a strong dollar on oil prices is at its most pronounced in more than a year, Refinitiv Eikon data shows.
Meanwhile, interest rate increases imposed by central banks in numerous oil-consuming countries to fight surging inflation has raised fears of an economic slowdown and accompanying slump in oil demand.
“With more and more central banks being forced to take extraordinary measures no matter the cost to the economy, demand is going to take a hit which could help rebalance the oil market,” said Craig Erlam, senior market analyst at Oanda in London.
Disruptions in the oil market from the Russia-Ukraine war, with European Union sanctions banning Russian crude set to start in December along with a plan by G7 countries for a Russian oil price cap, has lent some support to prices.
Attention is turning to what the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, together known as OPEC+, will do when they meet on Oct. 5, having agreed at their previous meeting to cut output modestly.
However, OPEC+ is producing well below its targeted output, meaning that a further cut may not have much impact on supply.
Data last week showed OPEC+ missed its target by 3.58 million barrels per day in August, a bigger shortfall than in July.