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European Union foreign ministers are split on whether to join
the United States in banning Russian oil. Some countries,
including Germany, say the bloc is too dependent on Russia's
fossil fuels to withstand such a step.
Brent crude fell $1.92, or 1.7%, to $113.70 a barrel at 0920
GMT. U.S. West Texas Intermediate crude slipped $2.82, or 2.5%,
to $109.3. Both contracts had settled up more than 7% on Monday.
Oil also slipped as the U.S. dollar strengthened after comments
from U.S. Federal Reserve Chair Jerome Powell on Monday that
flagged a more aggressive tightening of monetary policy than
previously anticipated. [USD/]
A strong dollar makes crude more expensive for other currency
holders and tends to weigh on risk appetite.
"The word 'transitory' regarding inflation is a distant memory,
chiefly due to rising commodity prices," said Tamas Varga of
broker PVM. "Central banks, led by the Federal Reserve stand
ready to increase the cost of borrowing significantly."
Brent hit $139 a barrel, the highest since 2008, earlier this
month. Threats to supply from the war in Ukraine and attacks by
Yemen's Iran-aligned Houthi group on Saudi energy and water
desalination facilities limited the downside.
Saudi Arabia said on Monday it would not bear responsibility for
any global supply shortages after the attacks by the Houthis, in
a sign of growing Saudi frustration with Washington's handling
of Yemen and Iran.
In focus later will be the latest round of U.S. inventory data,
which analysts expect to show no change in crude oil stocks. The
American Petroleum Institute, an industry group, issues its
supply report later on Tuesday. [EIA/S]
(Additional reporting by Mohi Narayan and Liz Hampton; Editing
by Barbara Lewis)
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