Prices continued to decline following comments from Federal Reserve Chairman Jerome Powell that lowering inflation could cause some economic pain. He said the US central bank would “continue to push” toward tightening monetary policy until clear evidence of a decline in inflation emerges.
The international benchmark Brent crude contracts ended the trading session as low as $2.31, or 2%, to record at $111.93 a barrel.
US West Texas Intermediate crude contracts closed down $1.8, or 1.6 percent, to $112.40 a barrel.
This is the first time since May 2020 that US crude closes at a higher level than Brent.
Reuters quoted sources as saying that the administration of US President Joe Biden will soon allow US oil companies to negotiate with the government of Venezuelan President Nicolas Maduro, which temporarily lifts a ban on such discussions.
Before that, Brent had risen earlier in the session to $115.69, the highest since March 28, while US crude recorded $115.56 a barrel, the highest since March 24.
Those high levels were reinforced by news that European Union foreign ministers failed on Monday in their effort to pressure Hungary to end its opposition to a proposed Russian oil embargo.
Figures showed that OPEC and its allies, including Russia, produced in April at levels much lower than required under an agreement to gradually ease record production restrictions that were introduced during the height of the pandemic in 2020.
The markets are awaiting the latest weekly data on oil stocks in the United States, which will be released by the American Petroleum Institute and the Energy Information Administration, which is expected to show an increase in crude stocks and a decrease in gasoline stocks.
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