Oil prices fell more than $4 on Wednesday, below levels seen before Russia’s invasion of Ukraine, as negative economic data from China heightened investor concerns about recession risks, Reuters reported, citing news.ro.

Brent crude futures fell $4.12, or 4.4%, to $88.71 a barrel, hitting their lowest level since Feb. 3 and falling below $90 a barrel for the first time since Feb. 8.

U.S. West Texas Intermediate crude fell $4.29, or 4.9%, to $82.46, its lowest level since Jan. 24.

“The market is now basing its fears on what will happen with high energy prices in Europe, slowing demand in Europe and rising interest rates,” said Phil Flynn, analyst at Price Futures Group.

Several central banks will continue to raise interest rates to fight inflation, but the United States appears to be better positioned to deal with the problems, economists say.

That lifted the dollar to a 24-year high against the yen and a 37-year high against the pound.

A stronger U.S. dollar puts pressure on oil prices, as most of the world’s oil sales are denominated in dollars.

Expectations of analysts

Analysts expect the European Central Bank to raise interest rates sharply at its monetary policy meeting on Thursday.

The meeting of the leadership of the US Federal Reserve System will be held on September 21.

The Bank of Canada raised its key interest rate by three-quarters of a percentage point on Wednesday to a 14-year high, as expected, and said it would need to be raised further due to inflation.

Weak economic data from China and Beijing’s strict zero-contagion policy for COVID-19 added to concerns about demand.

China’s crude oil imports fell 9.4% in August compared to the same period last year, according to customs data.

Prices under the influence of Putin’s warning

Prices were somewhat supported by Russian President Vladimir Putin’s warning that he would end the country’s oil and gas exports to Europe if price caps were imposed.

The European Union proposed capping Russian gas prices just hours later, raising the risk of energy rationalization in some of the world’s richest countries this winter. The Russian group Gazprom has stopped supplies through the Nord Stream 1 gas pipeline, cutting off a significant percentage of supplies to Europe.

Credit rating agency Fitch said on Tuesday that the shutdown of the Nord Stream 1 gas pipeline has increased the likelihood of a recession in the eurozone.

U.S. crude inventories were expected to fall for a fourth straight week by about 733,000 barrels in the week ended Sept. 2, a preliminary Reuters poll showed.