Oil prices decreased on Thursday due to a strong US dollar index and a weak demand outlook.
International benchmark Brent crude traded at $82.33 per barrel at 09.04 a.m. local time (0604 GMT), a 0.95% decrease from the closing price of $83.12 a barrel in the previous trading session.
Concurrently, the American benchmark West Texas Intermediate (WTI) traded at $78.43 per barrel, down 1.02% from the previous session’s close of $79.24 per barrel.
Fears of higher interest rates in the US pushed up the dollar, discouraging oil-importing nations from purchasing dollar-indexed crude.
The US dollar index, which measures the value of the American dollar against a basket of currencies, including the Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc, rose to 101.638 at 8.55 a.m. (0555 GMT), a 0.34% increase from Monday’s opening of 101.285.
Markets expect rising interest rates and high inflation to dampen oil demand. Fears heightened after Atlanta Federal Reserve President Raphael Bostic pointed to ‘one more interest rate rise’ to lower high inflation.
‘One more move should be enough for us to then take a step back and see how our policy is flowing through the economy, to understand the extent to which inflation is returning back to our target,’ Bostic said in an interview.
Meanwhile, a larger-than-expected draw in US oil inventories signals a recovery in US oil demand, limiting price decreases.
US commercial crude oil inventories decreased by 4.6 million barrels to 466 million barrels during the week ending April 14, according to data released by the Energy Information Administration late Wednesday.
The American Petroleum Institute expected a fall of 2.5 million barrels.
