US crude futures fell below $90 a barrel for the first time since February, the month Russia invaded Ukraine.
Futures dropped as much as 1% to $89.80 a barrel. Prices have given up all of their gains since the war began as higher interest rates and a looming global economic slowdown menace demand.
On the supply side, some of the extreme tightness seen in oil markets over recent months has also eased. Traders are paying smaller premiums for barrels for immediate delivery, and so far there’s been limited sign of a meaningful hit to Russia’s crude exports despite sanctions.
The slump in prices will continue to help alleviate the impact of higher fuel prices, which have fanned rampant inflation in the past few months.
On Wednesday, the Organization of Petroleum Exporting Countries and its allies announced one of their smallest production hikes ever in a sign of the limited spare capacity available.