Oil extended losses on Thursday as weak U.S. housing data and a series of disappointing quarterly results from some major retailers added to fears of a recession.
The uncertainty over sanctions on Russia by the European Union also weighed on oil prices.
European Union members are still struggling to agree on a sixth package of sanctions against Russia due to resistance by some member countries, including Hungary.
Benchmark Brent crude futures fell almost 1 percent to $107.96 a barrel, while U.S. crude futures were down 1.6 percent at $105.44.
Both contracts fell around 2.5 percent on Wednesday, reversing early gains.
Prices are rapidly rising worldwide, strengthening the case for a further increase in interest rates by global central banks.
Chicago Fed President Charles Evans said Wednesday that the Fed aims to reach a neutral rate -- the rate at which the economy is stable -- sooner rather than later, according to Bloomberg Television.
He expects the U.S. central bank to hike short-term interest rates by 50 basis points at the upcoming June meeting "and probably thereafter."
According to a May survey from Bank of America Global Research, top economists and money managers worldwide say they see "below-trend growth and above-trend inflation" as the most likely outcome for the global economy over the next year.
