The West Texas Intermediate for August delivery lost 3.33 U.S. dollars, or 3 percent, to settle at 106.19 dollars a barrel on the New York Mercantile Exchange. Brent crude for August delivery decreased 2.91 dollars, or 2.5 percent, to close at 111.74 dollars a barrel on the London ICE Futures Exchange.
The pullback came as traders grew concerned that the central banks' aggressive steps to combat inflation would slow growth and hurt demand for fuel.
In his testimony to U.S. Congress on Wednesday, Federal Reserve Chair Jerome Powell said that the central bank is trying to bring inflation down without inflicting too much damage, but the Fed's aggressive rate hikes could tip the U.S. economy into recession.
Oil participants also waited for data on U.S. fuel inventory as the Energy Information Administration is set to release its weekly petroleum status report on Thursday. Analysts surveyed by S&P Global Commodity Insights forecast the U.S. crude inventories to show a fall of 3.7 million barrels for the week ending June 17.