Brent crude futures fell 80 cents, or 0.9%, to $85.81 per barrel
by 1003 GMT, while U.S. crude futures fell $1.05, or 1.3%, to
$79.09 per barrel. Both benchmarks are on track for their
biggest daily percentage drop since Feb. 3.
The U.S. Department of Energy (DOE) said it would sell 26
million barrels of oil from the SPR, which is already at its
lowest level since 1983.
The DOE had considered cancelling the fiscal year 2023 sale
after U.S. President Joe Biden's administration last year sold a
record 180 million barrels from the reserve. But that would have
required Congress to act to change the mandate.
Supply concerns also eased after the Energy Information
Administration said it expected record March production from the
seven biggest U.S. shale basins.
Elsewhere, crude exports resumed at a key Turkish port after a
devastating earthquake rocked the region.
Monthly reports from the Organization of the Petroleum Exporting
Countries (OPEC) are expected later on Tuesday and from the
International Energy Agency (IEA) on Wednesday.
Traders will also be looking for clues from Tuesday's crucial
U.S. consumer price index (CPI) data for January. U.S. monthly
consumer prices rose in the previous two months.
A Reuters poll showed a majority of economists expect the U.S.
Federal Reserve to raise interest rates at least twice more in
coming months. Higher inflation and ensuing rate hikes may weigh
on risk assets such as oil.
"The upcoming data tsunami will greatly influence the immediate
risk appetite, but the broader view has not changed: inflation
will ultimately be defeated," said PVM analyst Tamas Varga.
"The second half of the year should bring with it tight oil
balance greatly aided by reviving Chinese growth."
(Additional reporting by Laura Sanicola; editing by Jamie Freed
and Jason Neely)
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