Oil falls on demand concerns, strong dollar

Oil fell on Thursday as expectations of weaker demand and a strong US dollar ahead of a potentially large interest rate increase outweighed supply concerns.

The International Energy Agency said this week oil demand growth would grind to a halt in the fourth quarter. The dollar held near recent peaks, supported by expectations the US Federal Reserve will continue to tighten policy.

Brent crude was down 53 cents, or 0.6 per cent, to $93.57 a barrel at 0827 GMT. US West Texas Intermediate crude gained 24 cents, or 0.3 per cent, to $88.72.

“There are many forces dictating the price action in oil markets right now, with economic uncertainty right up there,” said Craig Erlam of brokerage OANDA. “The stronger dollar is potentially another headwind.”

Crude has dropped substantially after a surge close to its all-time highs in March after Russia’s invasion of Ukraine added to supply concerns, pressured by the prospects of recession and weaker demand.

New clashes between Armenia and Azerbaijan, an oil producer, raised concern of threats to supply and limited the decline.