LONDON—Crude-oil futures fell more than 1% on more worries about the global economy.
Those concerns, as well as others about the finances of some European governments, also sent European stocks skidding and pushed down the euro against the dollar. A firmer dollar typically pressures oil prices as the commodity becomes more expensive for holders of other currencies.
Thin volumes across all markets were exaggerating moves, traders and analysts said.
Ahead of the New York day, the front-month September contract on the New York Mercantile Exchange was down $1.41, or 1.6%, at $86.17 a barrel. The front-month October Brent contract on London's ICE futures exchange was down $1, or 1%, at $109.33 a barrel.
Crude-oil prices already had fallen in the Asian day on weaker regional equities and as market participants focused on the surprise build in U.S. crude-oil inventories reported in weekly Department of Energy data Wednesday.
When the DOE report came out, the market had been more interested in the bigger-than-expected drop in U.S. gasoline stockpiles, which initially seemed bullish for crude prices as it appeared to indicate decent demand in the world's largest oil consumer. It was one of the factors helping Brent settle Wednesday above $110 a barrel for the first time in two weeks.
U.S. July consumer price index data and initial jobless claims will be a focus later in the day. Both are due at 8:30 a.m. EDT.
The European benchmark has surprised market participants by drifting up much faster than expected in recent days, despite the risk averse sentiment across markets generated by the euro-zone debt crisis and the U.S. downgrade.
Brent's strength has come because it is more focused on the tight supply picture due to the absence of Libyan barrels and potential disruptions in the U.S. Gulf during hurricane season than on sentiment, said SEB's chief commodities analyst Bjarne Shieldrop.
However, strong moves in equities and key currencies, such as the one experienced early Thursday, would still impact sentiment on Brent crude, he added.
Others said Brent's recent rebound may be done for now.
"It looks like the current rebound is about to run out of steam...we could well break the short-term uptrend and start consolidating here," says VTB Capital's Andrey Kryuchenkov.
