Oil prices decline due to economic concerns and the rise of the dollar

Oil prices fell in volatile trading on Tuesday as markets weighed the impact of European Union sanctions on Russian oil with demand concerns stemming from China’s COVID-19 lockdown measures, a strong dollar and recession fears.

By 0924 GMT, Brent crude prices fell 88 cents, or 0.8 percent, to $105.06 a barrel.

US West Texas Intermediate crude reached $102.43 a barrel, down 75 cents, or 0.7 percent.

The dollar has stabilized near its highest levels in 20 years, making oil more expensive for holders of other currencies.

The latest data showed that Chinese export growth slowed to less than 10 percent to its lowest level in nearly two years, with the expansion of the Corona restrictions in the country.

Financial markets are also anticipating fears that some European economies may face problems if their imports of Russian oil are further reduced, or if Russia responds by cutting off gas supplies.

In the United States, a preliminary poll conducted by Reuters on weekly data on Monday showed that stocks of crude, distillates and gasoline likely fell last week.

The European Commission’s delay in imposing a ban on Russian oil imports also affected futures prices.

Adding to the pressure on supply is the agreement of the Group of Seven major industrialized countries to gradually reduce Russian oil imports.