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Oil prices fell below $114 a barrel on Tuesday, giving up part of their 7 percent gains on Monday, as European Union member states split over a possible ban on Russian oil, but persistent supply risks limited prices.
The bloc’s foreign ministers were divided over whether to join the United States in imposing sanctions on Russian oil, with some countries, including Germany, saying the bloc is too dependent on Russian fossil fuels to tolerate such a step.
Brent crude fell $1.92, or 1.7 percent, to $113.70 a barrel. West Texas Intermediate crude fell $2.82, or 2.5 percent, to $109.3. Both contracts rose more than 7 percent on Monday.
Oil prices also fell as the US dollar rose after Federal Reserve Chairman Jerome Powell’s comments on Monday in which he indicated the possibility of a sharper tightening of monetary policy than expected.
A strong dollar increases the cost of crude to holders of other currencies and weakens risk appetite.
Earlier this month, Brent crude recorded $139 a barrel, its highest price since 2008. The risks to supply as a result of the war in Ukraine and attacks by the Iran-aligned Yemeni Houthi group on Saudi energy and water desalination facilities have limited the decline.
On Monday, Saudi Arabia said it would not take responsibility for any global supply shortfall after the Houthi attacks, in a sign of the kingdom’s growing frustration with Washington’s handling of Yemen and Iran.
The latest data on US crude oil inventories will be the focus of attention later. Analysts do not expect any change in crude oil prices. The American Petroleum Institute will release its supply report later on Tuesday.
