SULAIMANI (ESTA) — Crude oil prices edged lower on Thursday as the U.S. dollar strengthened after the United States Federal Reserve signaled it might raise interest rates faster than expected.
Brent crude oil futures fell by 43 cents to $73.96 a barrel by 0715 GMT after reaching its highest since April 2019 in the previous session.
U.S. crude oil futures dropped by 40 cents to $71.75 per barrel, after reaching its highest since October 2018 the previous day.
“Energy markets became so fixated over a robust summer travel session and Iran nuclear deal talks that they somewhat got blindsided by the Fed’s hawkish surprise,” senior market analyst at OANDA Edward Maya told Reuters.
“The Fed was expected to be on hold and punt this meeting, but they sent a clear message they are ready to start talking about tapering and that means the dollar is ripe for a rebound which should be a headwind for all commodities.”
The U.S. dollar boasted its strongest single day gain in 15 months after the Federal Reserve signaled it might raise interest rates at a much faster pace than assumed, Reuters reported.
Still, oil price losses were limited as data from the Energy Information Administration showed that U.S. crude oil stockpiles in the world’s biggest consumer dropped sharply last week as refineries boosted operations to their highest since January 2020, signaling continued improvement in demand.
