Investing.com -- Crude futures fell sharply on Tuesday, ahead of the American Petroleum Institute's weekly inventory report, paring some losses following dovish remarks from Janet Yellen on the Federal Reserve's intentions to maintain a gradual path for future interest rate hikes.
On the New York Mercantile Exchange, WTI crude for May delivery traded in a broad range between $37.92 and $39.46 a barrel, before settling at $38.35, down 1.04 or 2.64% on the session. The front month for U.S. crude futures fell for the fifth consecutive session, suffering its longest losing streak since mid-February. At session-lows, Texas light, sweet futures fell to its lowest level in nearly two weeks. In spite of the recent pullback, WTI crude is still up by more than 40% from its level on February 11 when it hit 13-year lows at $26.05 a barrel.
On the Intercontinental Exchange (ICE), brent crude for June delivery wavered between $39.47 and $40.85 a barrel, before closing at $39.95, down 0.92 or 2.25% on the trading day. North Sea Brent futures also dipped to near two-week lows during Tuesday's sell-off, closing below $40 for the first time since March 8.
As oil prices continued to retreat from 2016 yearly-highs on Tuesday, market players increased their short positions in crude amid longstanding worries related to an excessive supply glut on global energy markets. On Tuesday after the close of trading, investors will receive further indications on U.S. domestic supply levels when the API releases its weekly crude stockpile report. Separately, the U.S. Energy Information Administration (EIA) is expected to report a build of 3.16 million barrels last week, one week after domestic inventories surged more than 9.35 million barrels. At 532.5 million barrels, U.S. crude stockpiles reached an all-time record high for the week ending on March 24.
Elsewhere, oil markets showed little reaction to news that Iran will reportedly attend a highly-anticipated meeting between OPEC and Non-OPEC producers on April 17 in Doha. The summit will come approximately two months after Russia, Saudi Arabia and two other OPEC producers agreed in principle to limit output to its respective levels from January. More importantly, Iranian sources told Reuters that the nation will not necessarily partake in negotiations on a comprehensive production freeze even if it attends the meeting.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, fell more than 0.85% to an intraday low of 95.08 before settling at 95.18. The index is down by more than 1% over the last month of trading.
Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates.