Oil fell to $93 a barrel this afternoon to extend losses for the third consecutive day on fears that a possible US recession would weaken fuel demand there.
US crude eased 63 cents to $93.08 a barrel by noon, adding to yesterday's $1.96 decline. London Brent crude traded 67 cents lower at $91.55 a barrel.
Former US Treasury Secretary Lawrence Summers said yesterday the chance of a US recession was more than 50 per cent.
US Federal Reserve Chairman Ben Bernanke said yesterday the central bank was ready to take substantial measures to shore up the economy, raising expectations for a half-point interest rate cut at the Fed's January 29th to 30th meeting.
Mr Bernanke's comments helped ease a growing sense of gloom about the US economy. A recession would hit demand from the world's top oil consumer.
Another Fed rate cut could fuel selling of the already weak US dollar, potentially boosting crude and other dollar-denominated assets, which would become relatively cheap.
Oil has been trading above $90 for a month and hit a record high of $100.09 a barrel on January 3rd.
Oil began its slide on Wednesday after weekly data showed a surprising rise in US fuel stocks and a further steep decline in crude supplies.