{"id":2614,"date":"2022-12-06T14:25:00","date_gmt":"2022-12-06T14:25:00","guid":{"rendered":"http:\/\/roydadnaft.ir\/English\/?p=2614"},"modified":"2022-12-06T14:25:02","modified_gmt":"2022-12-06T14:25:02","slug":"oil-prices-fall-on-economic-fears-dollar-strength","status":"publish","type":"post","link":"https:\/\/roydadnaft.ir\/English\/2614\/","title":{"rendered":"Oil prices fall on economic fears, dollar strength"},"content":{"rendered":"
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Oil prices fell in a volatile market on Tuesday as the U.S. dollar stayed strong and economic uncertainty offset the bullish impact of a price cap placed on Russian oil and the prospects of a demand boost in China.<\/p>\n\n\n\n

Brent crude futures fell $1.21, or $1.46%, to $81.47 a barrel by 1254 GMT. West Texas Intermediate crude (WTI) fell $1.18, or $1.53%, to $75.75. Brent had risen by over $1 in Asian trading.<\/p>\n\n\n\n

Crude futures on Monday recorded their biggest daily drop in two weeks after\u00a0U.S. services industry data\u00a0indicated a strong U.S. economy and drove expectations of\u00a0higher interest rates than recently forecast.<\/p>\n\n\n\n

The U.S. dollar index edged lower on Tuesday but was still buoyed by bets of higher interest rates, following the biggest rally in two weeks on Monday.<\/p>\n\n\n\n

A stronger greenback makes dollar-denominated oil more expensive for buyers holding other currencies, reducing demand for the commodity.<\/p>\n\n\n\n

“Inflationary headwinds could still cause global economic turbulence in coming months,” said Tamas Varga of oil broker PVM, but added that “China’s gradual COVID opening is a tentatively positive development”.<\/p>\n\n\n\n

In China, more cities are\u00a0easing\u00a0COVID-19-related curbs, prompting expectations of increased demand in the world’s top oil importer.<\/p>\n\n\n\n

The country is set to announce a\u00a0further relaxation of some of the world’s toughest COVID curbs as early as Wednesday, sources said.<\/p>\n\n\n\n

The market was weighing the production impact of a price cap of $60\/bbl on Russian crude imposed by the Group of Seven (G7), the European Union and Australia, contributing to market volatility.<\/p>\n\n\n\n

The price cap adds to the disruption caused by the EU’s embargo on imports of Russian crude by sea and similar pledges by the United States, Canada, Japan and Britain.<\/p>\n\n\n\n

The embargo is likely to tighten market supply as the EU has to source crude from elsewhere, Commerzbank analyst Carsten Fritsch said in a note.<\/p>\n\n\n\n

Russia has declared its intention not to sell oil to anyone who signs up to the price cap.<\/p>\n\n\n\n

The threat of losing insurance will limit Russia’s access to the tanker market and could reduce crude exports by 500,000 bpd from February levels, said analysts from Rystad Energy in a note.<\/p>\n\n\n\n

Russia’s January-November oil and gas condensate rose 2.2% from a year earlier to 488 million tonnes, according to Deputy Prime Minister Alexander Novak, who\u00a0expects a slight output decline\u00a0following the latest sanctions.<\/p>\n

Updated on