After surging to above $5 per barrel the day before, oil prices decline and take a break

Following a session-long increase of more than $5 per barrel, oil prices declined on Tuesday.

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On anticipation that the US Federal Reserve’s interest rate hike may be less than anticipated, as well as a falling dollar that boosted buying interest, oil prices dipped on Tuesday, taking a pause after rising more than $5 a barrel in the previous session.

By 00:36 GMT, the contract for September Brent crude oil settlement had dropped 69 cents to $105.58 per barrel. Monday saw a 5.1% increase in the contract, the highest percentage rise since April 12.

The price of a barrel of August-delivery WTI crude dropped 65 cents to $101.95. On Monday, the contract rose 5.1%, the highest percentage increase since May 11.

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The August WTI contract expires on Wednesday, while the more popular September future was down 63 cents at $98.79 per barrel.

The previous week saw weekly drops of over 5% for both benchmarks.

Oil prices have been swinging back and forth between supply worries as a result of Western sanctions on Russian crude and fuel supplies disrupting trade flows to refiners and end-users and growing concerns that central bank efforts to contain surging inflation may result in a recession that would reduce future fuel demand.

During their meeting on July 26–27, two U.S. Federal Reserve officials predicted that the central bank would likely only increase interest rates by 75 basis points.

Less of an economic crisis that would limit fuel demand could result from a lower hike.