New York's main contract, West Texas Intermediate light, sweet crude for delivery in September, was down 92 cents to USD 85.71 a barrel in morning trade after plunging USD 5.30, or 5.8 per cent, in US trade yesterday.
It was the lowest closing price for WTI since February. Brent North Sea crude for September delivery shed 13 cents to USD 107.12 after falling USD 5.98, or 5.3 per cent, in London trade.
The crude price fall was "pretty much driven by macroeconomic concerns because of the weaker macroeconomic data that we have seen for the US so far," said Chen Xin Yi, commodities analyst for Barclays Capital in Singapore.
"The fear of a double dip recession with the slowdown in the US and the sovereign debt situation in Europe is having everybody biting their nails," added Adam Sieminski, chief energy economist of Deutsche Bank.
The steep drop in oil prices came as stock markets in the United States and Europe fell more than three percent on global economic worries.
Asian stocks also plummeted in early trade today following the carnage in the US and European markets.
Major markets in Japan, Australia and South Korea tumbled by at least four percent in the opening minutes of trade as already-fragile investor confidence was hammered by the eurozone debt crisis and more weak US economic data.