Oil prices fell today as the US dollar strengthened with US Federal Reserve (Fed) chair Janet Yellen’s suggestion that the first increase in interest rates could come in the first half of 2015.

The stronger dollar made commodities and oil priced in the currency dearer for holders of other currencies.

Brent crude dropped by $0.05 to $106.40 a barrel, while US oil was down by $0.16 to $98.73, reported Reuters.

"The stronger dollar made commodities and oil priced in the currency dearer for holders of other currencies."

Crude prices were positive in the early session, as the US expanded sanctions on Russian oil billionaire Gennady Timchenko. It is alleged that President Putin has a direct financial interest in the businessman’s energy-trading company, Gunvor Group.

Gunvor said that Timchenko had previously pledged his entire stake to his partner, Torbjorn Tornqvist. But US action could still make oil producers, traders and banks reluctant to do business with the company, affecting billions of dollars of physical and derivatives contracts.

The broader sanctions marked an escalation of efforts to punish Putin and his associates for Russian intervention in Ukraine’s Crimean region.

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By GlobalData

The oilman was one of 20 people added to a list of individuals banned from entering the US or doing business with US firms, as well as having any assets in the country frozen.

Image: US Fed will most likely end commodity-friendly stimulus this autumn. Photo: courtesy of Victor Habbick.

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