Crude oil prices pared early gains and fell sharply on Tuesday, weighed down by an announcement from the Biden administration about more sales from the national oil reserve to fight inflation at the pump.<\/p>\n
The dollar’s rebound from recent losses contributed as well to the drop in oil prices. The dollar climbed higher with traders looking ahead to the Federal Reserve’s policy announcement, due on Wednesday.<\/p>\n
The dollar index surged to 107.28, gaining more than 0.75%.<\/p>\n
The Energy Department and the White House said in a joint statement that the president had authorized the sale of a further 20 million barrels from the Strategic Petroleum Reserve by October, an addition to the already scheduled release of 180 million barrels.<\/p>\n
Oil prices rose earlier in the session after Russian energy giant Gazprom said that it will cut gas flows through Nord Stream 1 to 33 million cubic meters per day from Wednesday (July 27), which will be just 20% of normal capacity. <\/p>\n
Meanwhile, energy ministers from EU countries have reaced a deal on an unprecedented energy plan that will introduce a voluntary 15% reduction in gas consumption across the bloc from now until next spring.<\/p>\n
Markets now look ahead to weekly inventory reports from the American Petroleum Institute (API) and U.S. Energy Information Administration (EIA). The API’s data is due later today, while EIA’s report is due Wednesday morning.<\/p>\n
West Texas Intermediate Crude oil futures for September ended lower by $1.72 or about 1.8% at $94.98 a barrel.<\/p>\n
Brent crude futures were down $0.79 0r about 0.8% at $99.40 a barrel a little while ago.<\/p>\n
In economic news, data from the Commerce Department showed new home sales plunged by 8.1% to an annual rate of 590,000 in June after jumping by 6.3% to a revised rate of 642,000 in May. Economists had expected new home sales to tumble by 5.2% to an annual rate of 660,000 from the 696,000 originally reported for the previous month.<\/p>\n
With the bigger than expected decrease, new home sales slumped to their lowest annual rate since hitting 582,000 in April 2020.<\/p>\n
A separate report released by the Conference Board showed consumer confidence in the U.S. deteriorated by more than expected in the month of July.<\/p>\n
The Conference Board said its consumer confidence index slid to 95.7 in July from a downwardly revised 98.4 in June. Economists had expected the index to drop to 96.8 from the 98.7 originally reported for the previous month. <\/p>\n