Oil prices drop close to their lows for 2022 because of worries about the economy. This makes fears about supply lessen.

On Wednesday, oil prices went down, with Brent crude coming close to its lowest point of the year. This was due to worries about a recession and a lessening of fears that a Western cap on Russian oil prices would cut supply by a lot.

Big U.S. banks' warnings that a recession is likely to happen next year weighed on and helped the U.S. dollar. A stronger dollar makes oil more expensive for people who hold currencies other than the dollar and tends to make people less interested in risky investments.

At 10:20 GMT, the price of a barrel of Brent crude fell by $1.05, or 1.3%, to $78.30. It went as low as $77.74, which was the lowest since January 3. U.S. crude fell by $1.24, or 1.7%, to $73.01. It hit $72.25—the lowest price since late December—and stayed there for a while.

Claudio Galimberti, a senior vice president at Rystad Energy, said, "There is still a lot of uncertainty in the markets today." He also said that crude oil production in Russia might not drop as much as was thought earlier.

Brent settled below $80 on Tuesday for only the second time in 2022. This wiped out the year's gains, which had brought prices close to the all-time high of $147 in March after Russia invaded Ukraine.

There were fewer worries that putting a cap on the price of Russian crude would cause a supply shock. The Russian newspaper Vedomosti said on Wednesday that Russia is thinking about ways to fight the cap set by the West, such as stopping oil sales to some countries.

"The geopolitical risk premium has almost gone away, but worries about inflation haven't," said oil broker PVM. "It's clear that investors aren't at all worried about a possible shortage of oil that could happen because of the price cap and the EU's ban on Russian oil sales."

Prices were helped by the hope that Chinese demand would pick up.

China made the biggest changes to its anti-COVID policy since the pandemic started on Wednesday. It loosened rules that stopped the virus from spreading but hurt the world's second largest economy and led to protests.

Also helpful was a report from the American Petroleum Institute on Tuesday, which said that crude stocks had dropped by about 6.4 million barrels, according to market sources.

Focus is on the Energy Information Administration's latest report on U.S. supplies, which is due at 15:30 GMT, and whether it confirms the large drop in crude stocks.