Oil continued its retreat into a second session as galloping US inflation fueled concerns it would force moves that risk pushing the economy into a recession.

West Texas Intermediate fell 3.2% to settle below $100 a barrel for the first time since late April. The dollar advanced amid worries over tighter monetary policy, making commodities priced in the currency less attractive. Meanwhile, French President Emmanuel Macron and Hungarian Prime Minister Viktor Orban discussed energy security on Tuesday as the European Union seeks to persuade Budapest to drop its opposition to proposed sanctions on Russian oil imports.

“Crude oil may have finally topped out,” said Fawad Razaqzada, a market analyst with City Index and FOREX.com “I know that is a brave call to make and shorting oil is playing with fire given geopolitical risks.” However, the recent pullback should have spurred another round of buying but so far hasn’t, he added, which could signal a new, lower price range at which crude meets resistance based on chart technicals.

The market has swayed in recent weeks as interest rates rise, and China’s fight against Covid-19 threatens demand. At the same time, Saudi Arabia’s oil minister warned that the entire energy market is running out of capacity, a concern that could potentially drive prices higher. His United Arab Emirates counterpart added that without more global investments, OPEC+ wouldn’t be able to guarantee sufficient oil supplies when demand fully recovers from the pandemic.

Even as oil prices have dipped, US retail gasoline and diesel prices rallied to a record just ahead of the nation’s summer driving season. Meanwhile, US crude output growth appears to be slowing, leading the Energy Information Administration to cut its forecast for domestic oil production to 11.9 million barrels a day this year, compared with a previous estimate of 12.01 million, according to a monthly report.

A broader market sell off on Monday pushed oil down by the most since the end of March. Oil options markets were also caught up in the downturn, with bearish put options fetching a premium to bullish calls for the first time since the outbreak of the war in Ukraine in late February.

Oil crumpled under the weight of a broader market selloff as the European Union softened some of its proposed sanctions on Russian crude to appease potential holdouts.

West Texas Intermediate futures in New York dropped over $6 a barrel, the most since the end of March. The EU looked set to weaken its sanctions package on Russia, while Saudi Arabia cut its prices in a sign of flagging demand in top importer China. Equity markets retreated on concern over how much the Federal Reserve will have to boost rates to tame inflation.

“The less-prohibitive sanctions plan on Russian oil may take less of its supply offline and highlights the complexity of sanctions against Russian energy,” said Rohan Reddy, director of research at Global X Management. “The pushback from some EU members like Hungary and Slovakia could mean the EU may need to go back to the drawing board on its initial sanctions proposal.”

Crude has had a tempestuous 2022 as Russia’s invasion of Ukraine upended global commodity markets, lifting prices. The U.S. and the U.K. have already moved to ban imports of Russian fuel in response, but the weekend pledge by the G-7 will increase the pressure on Moscow further. Wider markets have also been roiled by the Federal Reserve’s aggressive rate hike path, adding volatility to crude trading.

Oil will continue to be “range bound because there’s still not enough supply for the market currently,” Reddy said. “Barring a major COVID-19 spread, a supply shortfall will still exist.”

The EU will drop a proposed ban on its vessels transporting Russian oil to third countries, but will retain a plan to prohibit insuring those shipments, according to documents seen by Bloomberg and people familiar with the matter. Over the weekend the leaders of the Group of Seven countries made a vow to ban imports from Russia. But most nations cutting Russian purchases have so far stressed the need for orderly change, allowing much of the rest of the year to wind down.

Beyond the ongoing war, Saudi Arabia cut prices for buyers in Asia as Covid-19 lockdowns in China weigh on consumption in the top importer. State-controlled Saudi Aramco lowered prices for the first time in four months, dropping its key Arab Light grade for next month’s flows to $4.40 a barrel above the benchmark.

Still, oil markets remain in backwardation, a bullish pattern marked by near-term prices commanding a premium to those further out. The spread between Brent’s two nearest December contracts touched $13.99 a barrel, close to the level seen in the initial weeks after Russia began its invasion.