Prices were also affected by the continued tumble of global stock markets Tuesday, the second day of sharp global declines.
"Investors are factoring in the rising prospect of a U.S. recession," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. "That's why we're seeing such a substantial sell-off in the stock markets."
Japan's Nikkei 225 index slid 5.7 percent while Hong Kong's Hang Seng index sank 8.7 percent. In India , trading was halted for an hour after the benchmark index plummeted 10 percent. In volatile afternoon trading, the Sensex index was down 7.2 percent.
A fair price for oil is between $87 and $90 a barrel, Galo Chiriboga, oil minister of Ecuador, the smallest producer in the Organization of Petroleum Exporting Countries, said yesterday.
OPEC, which pumps about 40 percent of the world's oil, will meet on Feb. 1 to review its production levels. Ecuador is against an increase in production, Chiriboga said.
An increase in production would be a "constructive response'' to the short-term impact high oil prices are having on the U.S. economy, Energy Secretary Samuel Bodman said in Abu Dhabi yesterday.