Oil prices fell on Tuesday (March 22) as the dollar strengthened and it seemed unlikely that the European Union would pursue an embargo on Russian oil, a day after Oil prices jumped 7% and also rose at the beginning of the session.
EU foreign ministers are divided over whether to join the US in an embargo on Russian oil. Some countries, including Germany, say the bloc is too reliant on Russian fuel to withstand the move.
End of the trading session on Tuesday, the Brent oil contract dropped 14 cents to 115.48 USD/barrel. The WTI oil contract lost 36 cents to $111.76 a barrel. On Monday (March 21), both oil contracts jumped more than 7%.
Oil was pressured by a stronger dollar, rising a day after comments from Federal Reserve Chairman Jerome Powell signaled a stronger tightening of monetary policy.
A strong dollar makes crude oil more expensive for holders of other currencies and tends to weigh in on risk appetite.
“The word ‘temporary’ in relation to inflation is a distant memory, mainly due to rising commodity prices,” said Tamas Varga of brokerage PVM. “Central banks, led by the Fed, are poised to raise rates significantly.”
Earlier this month, Brent crude jumped to $139 a barrel, its highest level since 2008.
Oil prices received support from supply threats when Yemen’s Houthi rebel group attacked Saudi energy and water desalination facilities. On March 21, Saudi Arabia said it would not be responsible for any global supply shortages following the Houthi attacks, showing growing frustration among Saudi Arabia. – Saudi Arabia on Washington’s handling of Yemen and Iran.