Oil prices fall owing to rising U.S. stocks and weaker demand

Oil prices dipped in early Asian trade on Wednesday with the release of U.S. inventory data indicating a rise in crude oil and refined products, amid rising fears of a global economic slowdown.

Brent oil futures shed 68 cents, or 0.7 percent , to $98.81 a barrel at 0002 GMT. The price of U.S. West Texas Intermediate crude oil dropped 72 cents, or 0.8 percent, to $95.12 a barrel, which is also the lowest level in three months.

Concerned that aggressive interest rate increases to battle inflation may precipitate a recession, which will severely influence oil consumption, investors have sold their oil holdings. Due to volatile trading, prices dropped by more than 7 percent in the previous session.

China's renewed COVID-19 travel restrictions had an effect on the market. Multiple cities in the world's second-largest economy have enacted further restrictions, ranging from firm closures to wider lockdowns, to prevent the spread of a highly dangerous virus strain.

During the week ending July 8, crude oil stocks climbed by around 4.8 million barrels in the United States. According to market sources citing data issued by the American Petroleum Institute on Tuesday, gasoline supplies grew by 3 million barrels, while distillate stockpiles increased by 3,3 million barrels.

The dollar index, which compares the dollar to a basket of six other currencies, reached its highest level since October 2002 on Tuesday, reaching 108.56.

Since oil is frequently priced in U.S. dollars, a stronger dollar makes the commodity more expensive for foreign currency holders. During times of market volatility, the dollar is often viewed as a safe haven by investors.