Oil extends losses as recession fears offset US inventory draw

Oil prices slipped on Wednesday, extending sharp losses from the previous session, even after a report showed that US inventories fell last week, as the market took stock of weak US data that raised fears of recession in the world's biggest economy, reports Reuters.

Brent crude fell by 60 cents, or 0.7 per cent, to $80.17 a barrel by 1212 GMT. US West Texas Intermediate crude fell 31 cents, or 0.4 per cent, to $76.76.

Earlier in the session, Brent drifted below $80 a barrel for the first time since March 31, just before the Organization of the Petroleum Exporting Countries (OPEC) and producer allies such as Russia, known collectively as OPEC+, announced an additional output reduction until the end of the year.

Russian Deputy Prime Minister Alexander Novak said on Wednesday that OPEC+ remains an efficient tool for coordination on global oil markets.

Oil prices dived more than 2 per cent on Tuesday amid lingering economic concerns and expectations of further interest rate hikes that could curtail fuel demand growth are countering signs of improving short-term consumption gains.

US consumer confidence dropped to a nine-month low in April as worries about the future mounted, heightening the risk of the economy falling into recession this year.