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Oil prices settle lower as stronger dollar offsets tight supply bets

Published 03/25/2024, 09:40 PM
Updated 03/26/2024, 03:47 PM
© Reuters.

Investing.com -- Oil prices settled lower Tuesday as a stronger dollar weighed on sentiment and overshadowed expectations for tighter supplies, driven by geopolitical tensions. 

By 14:30 ET (18.30 GMT), the U.S. crude futures settled 0.4% lower at $81.62 a barrel and the Brent Oil Futures contract fell 0.58% to $86.25 a barrel. 

Geopolitical tensions to support oil prices as focus shifts to Russia-Ukraine conflict

Oil prices are set to continue to ride threat to supply disruptions from ongoing geopolitical tensions, with disruption to Russia supply now in focus following a series of debilitating Ukrainian strikes on key Russian fuel refineries. 

"We expect Brent to grind higher until $90 or until we reach June," Macquarie said in a note, in the midst of the ongoing supply disruptions, particularly in Russia. 

Prices will likely be supported by geopolitical tension which has shifted back to Russia-Ukraine, Macquarie added. 

Still, a stronger dollar weighed on crude prices following data showing consumer confidence fell to the lowest level since November just ahead of a key inflation report later this week.  

Fresh update on U.S. crude supplies eyed 

Traders will look to the American Petroleum Institute report due later Tuesday for further insight into demand for crude following a string of a larger-than-expected draws driven by a pick-up in refinery .demand 

U.S. crude stocks fell by 1.95 million barrels for the week ended March 8, official data from the Energy Information Administration showed last week, compared with expectations for a draw of 0.9 million barrels.

UN passes Gaza ceasefire regulation

The UN Security Council on Monday voted in favor of a resolution calling for an immediate ceasefire between Israel and Hamas in the Gaza strip, at least for the holy Muslim month of Ramadan, with the U.S. abstaining.

But whether the resolution could result in an actual ceasefire being enforced still remained to be seen. 

The prospect of an Israel-Hamas ceasefire had weighed on oil prices in recent sessions, given that stability in the Middle East presents fewer disruptions in oil production and shipping activity. 

(Peter Nurse, Ambar Warrick contributed to this article.)

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