Crude oil futures ended deeply in red on Tuesday on rising dollar. The dollar index surged to 105.43 with traders betting on sharper interest rate cuts from the Federal Reserve. The Fed is widely expected to raise interest rate by 50 or 75 basis points. Meanwhile, cautiousness also prevailed on reports of a likely proposal to impose a federal surtax on certain oil companies to curb rising inflation. A sharp drop in natural gas prices amid reports that repairs to a damaged Freeport LNG terminal might not be on till later this year weighed as well on oil prices.
Benchmark crude oil futures for July delivery fell $2.00 or 1.7 percent to settle at $118.93 a barrel on the New York Mercantile Exchange. Brent crude for August delivery dropped $2.22 or 1.81 percent to settle at $120.03 a barrel (provisional) on London's Intercontinental Exchange.