By Stephanie Kelly
NEW YORK (Reuters) – Oil prices fell on Thursday after Brent hit a seven-year high above $90 a barrel, as the market balanced worries about tight global supply with expectations that the Federal US Reserve will tighten monetary policy soon.
Global benchmark Brent fell 62 cents to close at $89.34 a barrel, while U.S. crude closed down 74 cents at $86.61 a barrel in a volatile session with both contracts. moving between positive and negative territory.
Prices rose on Wednesday, with Brent rising above $90 a barrel for the first time in seven years amid tensions between Russia and the West. Threats to the UAE from the Yemeni Houthi movement have heightened nervousness in the oil market.
Russia, the world’s second-biggest oil producer, and the West are at loggerheads over Ukraine, stoking fears that energy supplies to Europe could be disrupted, although concerns are focused on gas supplies rather than oil. .
“The market is very erratic in the headlines about the Russia-Ukraine situation,” said Phil Flynn, senior analyst at Price Futures Group. “There is uncertainty about what will happen.”
The market is starting to turn its attention to the February 2 meeting of the Organization of Petroleum Exporting Countries (OPEC) and allies led by Russia, a group known as OPEC+.
OPEC+ is likely to stick to the planned increase in its oil production target for March, several of the group’s sources told Reuters.
(Additional reporting by Ahmad Ghaddar and Noah Browning in London and Emily Chow in Beijing)