London, (Business News Report)|| Oil prices fell, on Tuesday, in light of turmoil in the markets and volatile financial transactions in the global financial markets.
Oil prices fluctuate due to European Union sanctions on Russian oil, demand concerns stemming from China’s anti-coronavirus lockdown measures, a strong dollar and fears of an economic recession.
By 09:24 GMT, Brent crude prices fell 88 cents, or 0.8 percent, to $105.06 a barrel.
US West Texas Intermediate crude was $102.43 a barrel, down 75 cents, or 0.7 percent.
The dollar has stabilized near its highest level in 20 years, which made oil more expensive for holders of other currencies, according to Reuters.
The latest data showed that the growth of Chinese exports slowed to less than ten 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.
“The broader risk-off sentiment sparked by the recession fears, and China’s lockdowns are the major factors that pressure the oil price,” said CMC Markets analyst Tina Teng.
The global financial markets are also turbulent due to concerns about interest rate hikes and lockdown measures due to COVID-19 in China, which are hurting the world’s second largest economy.
The ongoing shutdowns in China may continue to affect oil prices in the near term, Teng said.
Brent and US crude rose last week for the second week in a row due to concerns about supplies after the European Commission proposed a phased ban on Russian oil as part of a package of tougher sanctions due to the war in Ukraine.
The proposal requires a unanimous vote among EU members.