Crude oil prices lost more than 5 percent Wednesday to reach their lowest levels in three months as signs of an improving economy raised the likelihood of a rate hike by the Federal Reserve.
The private sector added 298,000 jobs in February, according to the ADP National Employment Report, beating expectations of 190,000.
As the job market grows stronger, it is believed the Fed will increase its benchmark interest rate next week.
To help make that decision, the central bank will also focus on the country’s unemployment report due Friday.
The strengthening economy raised the possibility of an interest rake hike and the dollar gained ground against the pound, euro, and Japanese yen. The greenback was up around 2 percent against developing countries' currencies.
The stronger dollar helped increased pressure on crude prices that also felt the negative effects of rising weekly crude inventories in the U.S.
Crude stocks rose 8.2 million barrels last week, beating expectations of an increase of 2 million barrels, according to the Energy Information Administration (EIA).
It is the ninth consecutive week the U.S. has recorded rising inventories.
American benchmark West Texas Intermediate (WTI) fell nearly 6 percent to $50.06, while international benchmark Brent crude lost more than 5 percent to $52.94.
It was the lowest levels for the benchmarks since December.
By Ovunc Kutlu in Houston, Texas