Oil prices drop to 12-week low on recession, Covid worries

Dollar holds near 20-year high against other currencies; China reports new Covid cases across the country; Norwegian oil output to return within days after strike

Oil prices dropped to a 12-week low in volatile trade on Wednesday, extending Tuesday's heavy losses as growing fears of demand destruction from a global recession outweighed supply concerns.

Brent futures for September delivery fell $2.99, or 2.9%, to $99.78 a barrel by 10:57 a.m. EDT (1457 GMT), while U.S. West Texas Intermediate (WTI) crude fell $3.19, or 3.2%, to $96.31.

That puts WTI and Brent on track for their lowest closes since April 11, after Brent fell 9% and WTI fell 8% on Tuesday.

It also put both benchmarks in technically oversold territory with a relative strength index (RSI) below 30 for