On economic uncertainties, oil prices fall, alleviating supply fears.

Brent crude fell close to its yearly low on Wednesday, driven by recession fears and softening fears that a Western cap on Russian oil pricing would curb supply.

Big U.S. banks' warnings of a recession next year bolstered the U.S. dollar. A rising dollar makes oil more expensive for other currencies and reduces risk appetite.

Brent crude declined 1.3% to $78.30 a barrel by 1020 GMT. It hit $77.74, its lowest since Jan. 3. U.S. crude fell $1.24 or 1.7% to $73.01, the lowest since late December.

"There's still a lot of uncertainty in the markets," said Rystad Energy senior vice president Claudio Galimberti, adding that Russian crude production may not decline as much as projected.

Brent dropped below $80 on Tuesday for only the second time in 2022, reversing the year's gains that had driven prices to $147 in March when Russia invaded Ukraine.

Concerns about a supply shock from a Russian crude price restriction eased. According to Vedomosti, Russia is considering limiting oil sales to specific countries to oppose the Western quota.

"The geopolitical risk premium has almost evaporated," said oil dealer PVM. "Investors aren't worried about a supply constraint caused by the price cap and EU ban on Russian oil sales."

Chinese demand hopes supported prices.

China announced Wednesday the most extensive adjustments to its anti-COVID policy since the pandemic began, lifting curbs that slowed the world's second-largest economy and caused protests.

The American Petroleum Institute's announcement Tuesday that oil stocks declined by 6.4 million barrels also helped.

The latest U.S. supply data from the Energy Information Administration is coming at 1530 GMT.