Crude Oil Ends Sharply Lower As Ukraine Tensions Ease

(RTTNews) - U.S. crude oil snapped a two-day gain to end sharply lower on Tuesday, giving back much of the gains made yesterday after Russian leader Vladimir Putin recalled troops from military exercises near the Ukraine border. Facing recrimination from the U.S. and European Union, Putin sent forces back to their bases. Nonetheless, thousands of other troops remain in control of the Russian-speaking Crimea.

In his first remarks since the Ukraine crisis sparked-off, Russian President Vladimir Putin condemned the protests in Kiev and the ultimate ouster of Viktor Yanukovych. Putin termed the ouster as kind of coup, and stressed Kremlin's right to exercise force in Ukraine in the future to safeguard Russian nationals.

The Russian president ordered thousands of troops back from the Ukraine border ending military exercises near Crimea region border, raising hopes for a peaceful end to the standoff with its southern neighbors. Putin also said the Kremlin has no plans to annex the strategically important Crimea region.

Light Sweet Crude Oil futures for April delivery, the most actively traded contract, plummeted $1.59 or 1.5 percent to close at $103.33 a barrel on the New York Mercantile Exchange Tuesday.

Crude prices for April delivery scaled a high of $104.96 a barrel intraday and a low of $102.85.

Yesterday, crude oil prices surged to end at a 5-month peak of $105.22 a barrel, after amid escalating tensions in the Ukraine, where Russian forces took over the strategically important Crimea region. Some encouraging economic reports also supported oil prices, but the real focus was the geopolitical tensions in Ukraine with Russian crude oil and natural gas a big factor.

Markets will be watching for inventories data from the U.S. over the next few days. The American Petroleum Institute is out with its figures tonight, while the U.S. Energy Department releases its weekly stockpiles numbers Wednesday morning.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.16 on Tuesday, up from its previous close of 80.06 late Monday in North American trade. The dollar scaled a high of 80.21 intraday and a low of 79.92.

The euro traded higher against the dollar at $1.3737 on Tuesday, as compared to its previous close of $1.3734 late Monday in North America. The euro scaled a high of $1.3781 intraday and a low of $1.3722.

In economic news, inflation in the OECD area rose slightly in January, the Organisation for Economic Co-operation and Development said Tuesday. Consumer prices rose 1.7 percent year-on-year, following a 1.6 percent increase in December. Inflation was largely led by energy prices, which rose 2.1 percent annually versus 1.7 percent in December. Food price inflation, meanwhile, slowed to 1.4 percent from 1.5 percent. Excluding food and energy, core inflation in the OECD area held steady at 1.6 percent in January.

Month-on-month, OECD area prices edged up 0.1 percent in January. In the G20 area, inflation was 2.6 percent in January, which was slower than 2.9 percent in December. In the G7, inflation was 1.4 percent, unchanged from December. Within the G7, the U.K. logged the highest inflation rate of 1.9 percent for January.