Why oil prices are falling again

Compared to the previous day, however, the losses were limited. A barrel (159 liters) of North Sea Brent for delivery in March cost $75.63 around midday. That was 26 cents less than the day before. The price of a barrel of American West Texas Intermediate (WTI) for delivery in February fell 40 cents to $69.98.

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On the second trading day of the year, oil prices were well below the level at which they started the new trading year the day before. Recent tensions in the Red Sea with concerns about important trade routes for international merchant shipping only provided a temporary boost to prices before they came under pressure on Tuesday evening.

The market pointed out that there has not yet been a shortage of crude oil supply on the world market due to the tensions in the Red Sea. The price of crude oil from the North Sea fell by more than two dollars a barrel on Tuesday evening. Doubts had also arisen in the market about the implementation of the production cuts in important member states of the OPEC+ oil network. The Bloomberg news agency reported that Russia had noticeably increased its crude oil exports at the end of the year.

Investors generally avoided riskier investments, which also weighed on oil prices. In addition, prices on the oil market were weighed down by the recent development of the dollar. At the start of the new year, the US currency had gained strength. Because crude oil is usually traded in dollars, a stronger dollar makes the raw material more expensive on the global market, which tends to slow demand.

NEW YORK/LONDON (dpa-AFX)