Oil prices on Thursday fell as much as $1 after industry data showed a large expected increase in US crude stock for a second week, heightening concerns of a drop in fuel demand. 

Brent crude futures fell 82 cents or 1% to $84.16 a barrel at 0330 GMT, after losses of around 1% on Wednesday. US West Texas Intermediate (WTI) crude futures additionally declined 90 cents or 1.1% to $78.58 a barrel.

Tina Teng, an analyst at CMC Markets said- “The deteriorated U.S. economic data darkened the (oil) demand outlook as recession fears mount again. Risk-off sentiment has sent the growth-sensitive commodities down, typically oil,” 

“Profit-taking might be also a reason that pressed on the oil prices ahead of the U.S. major tech earnings.”

The market weakened on worries about a looming US economic slump after Federal Reserve officials said that the rates needed to rise beyond 5% to control inflation even after data showed that in December retail sales fell more than expected.

“This raised the specter of a recession, with threat urge for food struggling as a consequence,” ANZ Research analysts stated in a consumer observe.

Adding to that, according to the market sources, data from the American Petroleum Institute showed that the US crude oil inventories rose by about 7.6 million barrels in the week that ended on 13th January.

This big build marks the second consecutive week of large inventory increases. However, on a bullish note, distillate stockpiles, which include heating oil and diesel, fell by about 1.8 million barrels against analysts’ expectations for a 120,000-barrel increase.

With the aggressive rate hikes still on the cards, the US dollar climbed, Further weighing on oil demand, as a stronger greenback makes the commodity more expensive for those holding other currencies.