Oil prices fall amid strong US dollar and growth concerns


By Reuters IST (Released)

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The dollar trended higher on Thursday morning, after hitting a new two-decade high against a basket of currencies on Wednesday before pulling back. A strong dollar reduces demand for oil by making it more expensive for buyers using other currencies.

Oil prices fell early in Asian trading on Thursday as the strong dollar and economic difficulties outweighed optimism about consumer demand.

Brent crude futures fell 59 cents, or 0.7%, to $88.73 a barrel at 0016 GMT, while US crude futures fell 54 cents, to 81.59 dollars. Both benchmarks have rebounded in the previous two sessions amid volatile trading after hitting nine-month lows this week.

The dollar trended higher on Thursday morning, after hitting a new two-decade high against a basket of currencies on Wednesday before pulling back. A strong dollar reduces demand for oil by making it more expensive for buyers using other currencies.

The Bank of England said it was committed to buying as many long-term government bonds, known as gilts, as needed between Wednesday and October 14 to stabilize its currency after plans British government budget announcements last week sent the pound plummeting.

As markets tried to digest what the move meant for the pound, the currency took a misstep during Wednesday’s session, jumping as high as $1.09 and falling as low as $1.05. It was up 1.51% at $1.08.

Goldman Sachs cut its oil price forecast for 2023 on Tuesday, due to expectations of weaker demand and a stronger U.S. dollar, but said global supply disappointments have only strengthened its long-term bullish outlook.


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