FX.co ★ Oil Falls From Three-week High Amid Dollar Strength

Oil prices fell from three-week high on Tuesday and the dollar index climbed to March 2020 highs after Federal Reserve Bank of St. Louis President James Bullard said the U.S. central bank shouldn't rule out rate increases of 75 basis points to combat inflation.

Benchmark Brent crude futures fell 1.8 percent to $111.11a barrel, while U.S. crude futures were down 2 percent at $105.59.

More than 50 basis points is not my base case at this point as the central bank needs to move quickly to raise interest rates to around 3.5 percent this year with multiple half-point hikes, Bullard said in a virtual presentation to the Council on Foreign Relations on Monday.

It is feared that aggressive policy tightening would squeeze credit, thwart investment and growth.

The World Bank Group has lowered its projection for the rate of global economic growth in 2022 from 4.1 percent to 3.2 percent due to Russia-Ukraine war.

Demand worries also weighed as China continues to impose strict curbs to stem the tide of a new Covid 19 pandemic.