Oil Falls on Dollar Strength, But Demand Picture is Still Positive

Oil prices fell for the second session in a row Friday, June 18, as the US dollar rose thanks to the possibility of an increase in interest rates in the United States, but crude is on track to conclude the week with little change and just below its highest levels in several years.

Brent crude futures fell 47 cents, or 0.6%, to $72.61 a barrel, to continue a decline of 1.8% recorded on Thursday. The contract is heading towards its first weekly loss in 4 weeks.

US West Texas Intermediate crude futures fell 39 cents, or 0.6%, to $70.65 a barrel, after falling 1.5% on Thursday. West Texas crude is also heading towards recording its first weekly decline in four weeks.

On Wednesday, Brent hit the highest settlement price since April 2019 and WTI hit its highest level since October 2018 when it settled.

Oil prices also fell after Britain announced yesterday, Thursday, the largest daily increase in new infections with Covid-19 since February 19, as government figures show 11,007 new infections, compared to 9,055 the previous day.

Negative sentiment was boosted by comments by Iran’s chief negotiator on Thursday, who said talks between Tehran and Washington on reviving the 2015 Iran nuclear deal were closer than ever to reaching an agreement.