Oil prices fall and the dollar soars as Europe moves away from Russia’s oil

Oil prices fell on Wednesday as the strong dollar made the barrel more expensive, Germany, Europe’s largest economy, accelerated plans to withdraw from Russia’s oil, and the outbreak of the coronavirus clouded China’s economic outlook.

Brent crude futures have wiped out their previous rise and fell 54 cents (0.5%) to $ 104.45 a barrel by 1259 GMT. US West Texas intermediate crude oil futures fell 79 cents (0.8%) to $ 100.91 a barrel.

Russia’s energy giant Gazprom said Wednesday that it had cut off gas supplies to Bulgaria and Poland in a large-scale escalation of Russia’s wider line with the West over Ukraine.

European Commission Chair Ursula von der Leyen said Russia is using fossil fuels to send the EU by blackmail, but the era of Russian fossil fuels in Europe is nearing its end. He added that he was.

Germany is trying to become independent of Russia’s oil imports. The Federal Minister for Economics of Germany said German plans are underway to control the PCK Schwedt refinery, which is owned by Rosneft and is the last major German purchaser of Russian crude oil.

US government data on oil inventories are scheduled for late Wednesday. According to industry data on Tuesday, US crude oil and distillation inventories increased last week, but gasoline inventories decreased.

It also restrained oil prices from rising, with the dollar rising to its highest level in five years, making oil purchases more expensive for holders of other currencies.

“Last week’s US oil construction and still strong Russian oil exports are limiting oil growth,” said Giovanni Staubono, a UBS commodity analyst.

“This is a risk-off environment with a stronger US dollar and movement restrictions in China, the second largest oil consumer.”

China’s central bank has decided on monetary policy to eradicate the early COVID-19 outbreaks in the capital and avoid the same type of debilitating city-wide blockade that Shanghai had received for a month. He said he would strengthen support. Any stimulus will boost oil demand.

The International Monetary Fund (IMF) has warned that Asia is facing a “stagnation” outlook. Still, domestic demand in China is recovering, said travel data company OAG.

By Shadia Nasralla