The price of oil fell as low as US$86 a barrel Tuesday as shaky economic recoveries in China and the U.S. raised the prospect of weaker demand. It later recovered most of the losses, however, as some investors deemed the price had dropped too much in recent days.

By early afternoon in Europe, benchmark West Texas Intermediate crude for May delivery was down 14 cents at US$88.57 a barrel in electronic trading on the New York Mercantile Exchange. Earlier in the session it had fallen as low as $86.06 a barrel.

On Monday, the contract plunged $2.58, or 2.8 per cent, to finish at US$88.71 a barrel.

Crude has lost nearly 10 per cent this month on concerns that the global economy may be slowing and that supplies remain ample.

The Chinese government on Monday said growth in the world’s second-largest economy slowed to 7.7 per cent in the first quarter from 7.9 per cent in the final quarter of last year. Growth had been expected to accelerate slightly to 8 per cent.

Analysts have warned that China’s recovery from its deepest slump since the 2008 global crisis is weak. That slowdown, combined with weak U.S. employment and manufacturing, suggests that demand won’t be strong enough to absorb the ample supplies on the world market.

“This isn’t a fall just because the global economy is shifting down — this is about a world that has enough oil,” said Carl Larry of Oil Outlooks and Opinions in a market commentary.

Analysts at JBC Energy in Vienna said the large slide in oil prices over the last days was “difficult to justify on fundamental grounds,” and was due in part to a general slump in commodity prices.

“We believe that the current drop in oil values is to be short lived and that outright prices will recover in the weeks and months to come, primarily on the back of increased Chinese buying and the end of refinery maintenance season,” JBC Energy said.

Brent crude, which is used to price oil used by many U.S. refiners to make gasoline, was down 42 cents at US$100.21 a barrel on the ICE Futures exchange in London. Earlier in the session Brent fell below US$100 a barrel for the first time since July.

In other futures trading on the Nymex, wholesale gasoline added 0.03 of a cent to US$2.761 a U.S. gallon (3.79 litres), heating oil dropped 1.92 cents to US$2.81 a gallon and natural gas rose 0.1 of a cent to US$4.147 per 1,000 cubic feet.

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