Singapore, Feb. 21 (BNA): Benchmark Brent crude opened slightly lower on Tuesday as the US dollar strengthened and traders waited for clues from US Federal Reserve meeting minutes, after optimism about demand amid tight supplies sent prices higher on Monday.
Brent crude fell 59 cents, or 0.5 percent, to $83.57 a barrel on Tuesday. U.S. West Texas Intermediate crude for March, which expires on Tuesday, was up 78 cents, or 1.02%, at $77.12 at 0146 GMT, Reuters reported.
WTI futures did not settle on Monday due to a public holiday in the United States. The April West Texas Intermediate contract, which is currently the most active, rose 52 cents, or 0.68%, at $77.07.
“The US dollar rose and pressured oil prices in today’s Asian session, causing oil markets to pull back from yesterday’s rally,” said Tina Ting, an analyst at CMC Markets.
Traders await the minutes of the Federal Reserve’s latest meeting, scheduled for Wednesday, as data on core inflation raises the risk that interest rates will remain elevated for a longer period.
With China’s oil imports likely to reach a record high in 2023 and rising demand from India, the world’s third largest oil importer, amid tight supplies, eyes are now turning to monetary policy in the world’s largest economy and oil consumer.
Analysts say oil prices may rise in the coming weeks due to supply shortages and a recovery in demand, despite near-term hurdles such as a hike in US interest rates.
OANDA analyst Edward Moya said Chinese demand for Russian crude had returned to levels seen at the start of the war in Ukraine.
“The West will try to pressure China and India from looking for alternative sources, which would keep the oil market tight,” Moya said.
Russia plans to reduce oil production by 500 thousand barrels per day, equivalent to about 5% of its production, in March after the West imposed ceilings on the prices of oil and Russian oil products.
“Despite the short-term price action of overstock build-up in the US last week, oil markets still face an undersupply problem due to China’s reopening and upcoming production cuts in Russia,” said CMC’s Teng.