Oil prices fell in volatile trade on Tuesday as the market balanced impending European Union sanctions on Russian oil with demand concerns related to coronavirus lockdowns in China, a strong dollar and growing recession risks. 
 
Brent crude was down 88 cents, or 0.8 per cent, at $105.06 a barrel at 0924 GMT, while US West Texas Intermediate crude fell 75 cents, or 0.7 per cent, to $102.34 a barrel.
 
"The combination of COVID-related lockdowns in China and worldwide interest rate increases to battle inflation put equity investors on the back foot, strengthened the dollar and significantly raised concerns of economic slowdown," said Tamas Varga of oil broker PVM.
 
The dollar held near 20-year highs, making oil more expensive for holders of other currencies. 
 
The latest data showed China's export growth had slowed to single digits, their weakest in almost two years, as the country extended lockdowns.
 
Financial markets are also heeding concerns that some European economies could suffer distress if Russian oil imports were curtailed further, or if Russia retaliated by cutting off gas supplies.
 
German officials are quietly preparing for any sudden halt in Russian gas supplies, Reuters reported. A halt would trigger a deep recession and cost half a million jobs, a senior economist said in an interview published on Tuesday.
 
In the United States, crude, distillates and gasoline inventories likely fell last week, a preliminary Reuters poll of weekly data showed on Monday.
 
Delays to the EU Commission's proposal to ban oil imports from Russia have also weighed on futures prices. 
 
But French European Affairs Minister Clement Beaune said on Tuesday that EU members could reach a deal this week on Russian oil sanctions, adding that French President Emmanuel Macron is due to talk to Hungarian Prime Minister Viktor Orban later in the day. Hungary is the most vocal critic of the planned embargo on Russian oil.
 
Adding to supply concerns, G7 countries have agreed a gradual import ban on Russian oil. And Japan, which obtained 4 per cent of its oil imports from Russia last year, has also agreed to phase out its Russian oil purchases.
 
Brent and WTI futures rose by over $1 per barrel earlier in the session following bearish comments from the Saudi and UAE energy ministers. 
 
The world needs to wake up to an existing reality of running out of capacity at all levels, Saudi Arabia's Prince Abdulaziz bin Salman said on Tuesday.
 
Meanwhile, UAE energy minister Suhail al-Mazrouei said a lack of investment could contribute to a supply shortage when demand recovers. --Reuters