Oil prices declined on Thursday as dollar gained strength after the US Federal Reserve indicated towards tightening its monetary policy earlier than expected.
“Dollar strength and lower inflation expectations and a general reduction in risk appetite has for now reduced investment appetite in crude oil,” Bloomberg reported, citing Ole Hansen, Head of Commodities Straetgy at Saxo Bank.
“The oil market is not only driven by fundamentals which are currently supportive, but also financial investors buying oil for other reasons, such as momentum, inflation hedge and dollar plays.”
The international benchmark Brent crude was trading down 0.6% at $73.94 per barrel, at 2.20 pm Makkah time.
WTI crude fell 0.5% to $71.78 per barrel.
“This pullback in oil prices should be temporary as the fundamentals on both the supply and demand side should easily be able to compensate for a rebounding dollar,” Reuters reported, citing Edward Moya, senior market analyst at OANDA.
Comments
{{DisplayName}}
{{ElapsedTime}}