Crude prices fall as dollar, US oil stocks rise

Oil futures fell on Wednesday, continuing the previous day’s declines, as a stronger US dollar triggered additional selling, while data suggesting an increase in US crude supplies and Shanghai’s extended lockdown fueled concerns about slowing demand.

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Brent crude futures were down 97 cents, or 0.9%, to $105.67 per barrel, while US West Texas Intermediate futures were down 98 cents, or 1.0%, to $100.98 per barrel. On Tuesday, Brent dipped 0.8% and WTI sank 1.3%.

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The US dollar rose to its highest level in almost two years on Tuesday, driven by hawkish comments from Federal Reserve officials who urged the central bank to reduce its bloated balance sheet as soon as possible. A stronger dollar raises the price of oil for holders of other currencies.

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US crude and distillate stocks rose last week while gasoline inventories dipped, reported Reuters, citing American Petroleum Institute figures on Tuesday.

Crude stockpiles increased by 1.1 million barrels in the week ending April 1, compared to experts’ expectations of a 2.1 million barrel fall.

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Concerns over demand grew when officials in top oil importer China extended a lockdown in Shanghai to encompass the whole 26 million population.

Nonetheless, losses were modest as the prospect of more sanctions in response to alleged war crimes committed by Russian forces in Ukraine stoked fears about supply interruptions.

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On Tuesday, Britain asked the G7 and NATO nations to ban Russian ships from their ports, set a schedule for phasing out Russian oil and gas imports, and strengthen sanctions on banks and vital industries.

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Meanwhile, International Energy Agency (IEA) member nations were still debating how much oil they would release from storage collectively to calm markets with an announcement due in the coming days, according to Reuters.