Oil prices give up four-month high on profit-taking

Global oil prices fell in European trade for the first time in five sessions off four-month highs on active profit-taking while the dollar gains ground.

Traders await initial data on US crude inventories from the American Petroleum Institute, expected to show a decline for the second straight week.

Global Prices

US crude fell 0.4% to $81.83 a barrel, while Brent shed 0.5% to $86.51 a barrel.

On Monday, US crude rallied 1.45%, the fourth profit in a row, marking a four-month high at $82.46 a barrel, while Brent rallied 1.9% to $87.15, the highest since November 2023. 

The strong gains amid concerns about supply disruptions from Russia as Ukraine intensifies its bombardment of Russian energy infrastructure, and with hopes for improving Chinese demand after strong industrial production data.

The Dollar 

The dollar index rose 0.4% on Tuesday on track for the fourth straight profit, hitting a three-week high at 104.06 against a basket of major rivals.

A stronger dollar weighs on prices of greenback-denominated  commodities as they become costlier to holders of other currencies. 

Dollar’s gains come as US 10-year treasury yields rally as well ahead of the Federal Reserve’s policy decisions this week, expected to maintain interest rates unchanged at 2001 highs.

US Stocks

The American Petroleum Institute will release initial data on US crude stocks later today, expected to show a drawdown for the second week in a row.