Oil down with dollar value on rising trend and demand fears from Fed monetary policy

Oil prices dipped on Friday as the growing value of the US dollar discouraged traders of other currencies and raised concerns about the trajectory of global economies, although impending OPEC+ curbs restrained further negative price pressures.

International benchmark Brent crude traded at $83.58 per barrel at 9.51 a.m. local time (0651 GMT), a 0.25% loss from the closing price on Thursday of $83.79 a barrel.

The American benchmark West Texas Intermediate (WTI) traded at the same time at $79.92 per barrel, down 0.21% from the session close of $80.09 per barrel on Thursday.

The increasing value of the US dollar was the main driver of the price downturns during the last trading day of the week.

Despite a drop in the greenback during the early Asian trading session, the dollar has been on a rising trend, gaining approximately 1.5% since last week on market optimism that the US Federal Reserve’s (Fed) aggressive monetary policy has finally ended.

Meanwhile, the Fed increased its benchmark interest rate by 25 basis points as anticipated, resuming its war against inflation and carrying the rate to its highest in more than 22 years, despite a notable slowdown in price rises in recent months.

Leaving the door open for another hike of 25 basis points this year, Fed Chair Jerome Powell was less optimistic about the progress achieved in reducing inflation.

‘Inflation has moderated somewhat since the middle of last year,’ Powell said at a news conference in Washington on Wednesday.

‘Nonetheless, the process of getting inflation back down to 2% has a long way to go,’ he added.

Investors are now awaiting the OPEC+ production cuts, which are scheduled to come online on Aug. 1, amid fears of tightening market supplies.

• OPEC+ curbs
• WTI