Oil closed below $93 per barrel on Friday, extending losses for the third consecutive day, on fears that a possible U.S. recession would weaken fuel demand from the world's largest energy consumer.
U.S.light, sweet crude lost $1.02 to close at $92.69 in Nymex trade, following Thursday's $1.96 decline.
London Brent crude traded lower.
Former U.S. Treasury Secretary Lawrence Summers said on Thursday the chance of a U.S. recession was more than 50 percent.
"The supply situation for crude remains very tight, but the looming 'R' word seems to have aroused more fear in market participants' psyches," said MF Global.
For The Investor:
U.S. Federal Reserve Chairman Ben Bernanke said on Thursday the central bank was ready to take substantial measures to shore up the economy, raising expectations for a half-point interest rate cut at the Fed's Jan. 29-30 meeting.
Bernanke's comments helped ease a growing sense of gloom about the U.S. economy. A recession would hit demand from the world's top oil consumer.
Another Fed rate cut could fuel selling of the already weak U.S. dollar, potentially boosting crude and other dollar-denominated assets, which would become relatively cheap.
Oil has been trading above $90 for a month and hit a record high of $100.09 a barrel on Jan. 3.
Oil began its slide on Wednesday after weekly data showed a surprising rise in U.S. fuel stocks and a further steep decline in crude supplies.
Forget terror & war -- demand trumps geopolitics:
In Nigeria, militants fighting for autonomy in the country's oil producing south detonated a remote controlled bomb on an oil tanker on Friday, causing a big fire.
It was the second rebel attack on Africa's largest oil industry in a week, but exports of crude were unaffected, industry sources said.
The market also found support from data showing China's unwavering thirst for oil.
The world's second-largest oil consumer boosted purchases of crude imports by 12.4 percent last year as the economy boomed, domestic production growth stalled and new oil storage tanks were filled.