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Crude falls on EU split over Russian ban

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By Alex Lawler

LONDON, March 22 – Crude prices fell on Tuesday as members of the European Union disagreed over a possible oil embargo on Russia, although persistent supply risks limited the decline.

* EU foreign ministers are divided on whether they joined the United States in banning Russian oil. Countries like Germany say the bloc is too dependent on fossil fuels from Russia to support such a move.

* By 1015 GMT, Brent crude was down 79 cents, or 0.68%, at $114.79 a barrel, and West Texas Intermediate in the United States (WTI) was down $1.52, or $1.36. %, at $110.60. Both contracts climbed more than 7% in the day before.

* Oil also fell as the dollar strengthened following comments from Federal Reserve Chairman Jerome Powell on Monday that indicated more aggressive monetary policy tightening than had been anticipated.

* A strong dollar makes oil more expensive for holders of other currencies and tends to weigh on risk appetite.

* “The word ‘transitory’ when it comes to inflation is a distant memory, especially due to rising commodity prices,” said Tamas Varga of brokerage PVM. “Central banks, led by the Federal Reserve, are willing to raise the cost of borrowing significantly.”

* Brent reached $139 a barrel earlier this month, its highest level since 2008. Supply threats stemming from the war in Ukraine and Yemen’s Houthi attacks on Saudi energy and water desalination facilities limited read down.

* Later, attention will turn to the latest US inventory data, which analysts expect will show no change in crude stocks. The American Petroleum Institute, an industry group, will release its supply report later Tuesday.

(Reporting added to Mohi Narayan and Liz Hampton; Spanish editing by Carlos Serrano)

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