London — Oil prices edged lower on Monday as a stronger dollar discouraged buying, though losses were limited by supply concerns after Russia halted exports to Poland via a key pipeline.
Benchmark Brent crude futures were down 34 cents, or 0.4%, at $82.82 a barrel at 1430 GMT, while West Texas Intermediate U.S. crude futures (WTI) traded at $75.94, down by 38 cents or 0.5%.
Both benchmarks closed more than 90 cents higher on Friday.
The dollar hovered near a seven-week peak on Monday after a slew of strong U.S. economic data reinforced the view that the Federal Reserve will have to raise interest rates further and for longer.
A firm dollar makes commodities priced in the U.S. currency more expensive for holders of other currencies.
Fears of a hawkish Fed returned to the fore after data on Friday showed the U.S. personal consumption expenditures (PCE) price index shot up 0.6% last month after gaining 0.2% in December.
“Crude continues to take direction from the sentiment in the broader financial markets,” said Vandana Hari, founder of oil market analysis provider Vanda Insights. “If risk aversion continues to grow, crude will likely come under renewed pressure.”
Meanwhile, Russia halted supplies of oil to Poland via the Druzhba pipeline, Polish refiner PKN Orlen said on Saturday, a day after Poland said it had delivered its first Leopard tanks to Ukraine.
Russian pipeline operator Transneft blamed the halt on a lack of completed paperwork for supplies for the second half of February.
Russia announced plans earlier this month to cut oil exports from its western ports by up to 25% in March versus February, exceeding its previously mooted production cuts of 5%.
Still, most analysts see a European Union ban on Russian seaborne oil imports and an international price cap having only a small impact on overall global supply.
“Russian oil output has exceeded expectations in recent months due to lax EU/US sanctions,” Bank of America said in a note.
Adding some downside pressure, U.S. crude oil inventories surged to the highest level since May 2021 last week, data from the Energy Information Administration (EIA) showed.
Additional reporting by Mohi Narayan in New Delhi and Sudarshan Varadhan in Singapore; editing by Kirsten Donovan, Jason Neely and Susan Fenton – Reuters
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