Oil slides on strong dollar and weaker demand outlook

Recession fears and China COVID curbs weigh on oil; Brent and WTI slide by more than $6 a barrel

Oil prices fell sharply on Tuesday on a strong dollar, demand-sapping COVID-19 curbs in top crude importer China and fears of a global economic slowdown.

Brent crude futures were down by $6.15, or 5.7%, at $100.95 a barrel by 1347 GMT. U.S. West Texas Intermediate crude was down $6.30, or 6.1%, at $97.79.

The euro lost ground on Tuesday, trading near parity with the dollar, while stock markets fell on the prospect of rising interest rates and worries over economies worldwide.

A stronger U.S. currency usually weighs on oil because it makes the dollar-priced commodity more expensive for holders of other currencies.

"In the West, the combination of high energy prices and rising interest rates is fuelling concerns about a recession that would have a serious impact on oil demand," Commerzbank said.

Renewed COVID-19 mobility curbs in China were also weighing on prices, the bank said.

Multiple Chinese cities are adopting fresh COVID-19 curbs, from business shutdowns to broader lockdowns in an effort to rein in new infections from the highly infectious BA.5.2.1 subvariant of the virus.