Oil prices fell early Tuesday, March 19, after rising in the previous session, amid expectations of increased supplies from Russia and the possibility of a larger-than-expected decline in demand for jet fuel.
Brent crude futures for May delivery were down 16 cents at $86.73 a barrel by 0300 GMT, while U.S. West Texas Intermediate (WTI) crude was down 13 cents at $82.03. The April WTI contract, which expires tomorrow, was down 16 cents at $82.56.
Both benchmarks hit four-month highs in the previous session, supported by lower crude exports from Saudi Arabia and Iraq and signs of strong demand and economic growth in China and the United States.
On Russia, concerns over increased exports following Ukrainian attacks on the country's oil infrastructure continued to weigh on prices.
The attacks are likely to reduce the amount of Russian crude being processed by refineries by up to 300,000 barrels per day, in addition to scheduled maintenance shutdowns, analysts at JP Morgan said in a note to clients. “However, the reduced operation will increase crude exports, helping Russia achieve production cuts while keeping exports steady.”
Russia will increase its oil exports via its western ports in March by about 200,000 barrels per day, while daily shipments will rise by 10% compared to its initial plan for March, Reuters calculations showed.
Meanwhile, five sessions of dollar gains capped oil's upside, with the greenback hitting its highest level in nearly two weeks against a basket of major currencies.
A stronger dollar usually makes oil more expensive for holders of other currencies.
On the demand side, analysts expressed caution about growth in jet fuel demand ahead of the summer travel season.
