Oil tumbled the most in a week as global financial markets swooned and the swelling US crude stockpiles reinforced the fears about an economic slowdown.
Futures slipped more than 5 percent in New York, joining a slide in equities.
American crude inventories registered a surprise increase for the second straight week, US data showed on Wednesday, although gasoline demand was also healthy.
Investors were already fleeing commodities and other higher-risk assets as sagging Treasury yields sounded alarm bells for a recession.
“People are panicking,” said Mark Waggoner, president of Oregon brokerage Excel Futures Inc.
“They are saying ‘I can’t be long crude here if the economy is going to slow down.’”