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Oil prices declines from 3-month peak ahead of US inventory data

by Holly

Oil prices fell on Tuesday for the first session in four days away from a three-month high on profit-taking, as dollar gains ground ahead of the Federal Reserve’s policy meeting.

The decline comes ahead of US crude inventory data amid expectations of a drop in US crude stocks for a second week.

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Global Oil Prices

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US crude fell 0.6% to $78.66 a barrel, with a session-high at $79.05, while Brent fell 0.7% to $81.98 a barrel.

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US crude rose 2.75% on Monday, the third profit in a row, marking a three-month high at $79.24, while Brent climbed 2.25%, hitting late April highs at $82.86.

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Such gains are due to expectations of a shortage in the second half of the year as both Russia and Saudi Arabia start voluntary production cuts.

The Dollar

The dollar index rose 0.2% on Tuesday for the sixth straight session, scaling a two-week high at 101.65 against a basket of major rivals.

A stronger dollar weighs on commodities and minerals, making them costlier to holders of other currencies.

Dollar’s gains come ahead of the Federal Reserve’s policy meeting, expected to end up with a 0.25% rate hike.

US Stocks

The American Petroleum Institute will release its initial data on US crude stocks, expected to show a drop of 2.4 million barrels last week.

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