Oil falls on fears of weak demand and a strong dollar

Oil prices fell on Thursday, as concerns about weak demand and a stronger dollar ahead of a possible big interest rate hike raised concerns about tight supplies.

The International Energy Agency announced this week that oil demand growth will stall in the fourth quarter. The dollar also settled on Thursday near its recent highs, supported by expectations that the Federal Reserve will continue to tighten monetary policy.

Brent crude fell 56 cents, or 0.6 percent, to $93.54 a barrel by 0951 GMT. US West Texas Intermediate crude fell 44 cents, or 0.5 percent, to $88.04.

Fresh clashes between oil-producing Armenia and Azerbaijan, in connection with a decades-old conflict between the two ex-Soviet states, have raised concerns about supplies, although a senior Armenian official said on Wednesday that a truce had been agreed.

The data released by the Energy Information Administration showed that US crude stocks and distillates rose more than expected in the last week, indicating weak demand for fuel and limiting oil prices.

The strong dollar is one of the factors negatively affecting the demand for oil, as dollar-denominated commodities, including crude oil, become more expensive for buyers who hold other currencies.