Oil prices slipped on Thursday over the double whammy of the rising value of the US dollar, as the country’s Federal Reserve indicated it would raise interest rates sooner than expected, and a surprise rise in US fuel stocks, signaling sliding demand.
International benchmark Brent crude was trading at $74.02 per barrel at 06.22 GMT for a 0.49% decrease after closing Wednesday at $74.39 a barrel.
American benchmark West Texas Intermediate (WTI) traded at $71.81 a barrel at the same time for a 0.47% drop after ending the previous session at $72.15 per barrel.
The price of crude began declining soon after the Fed signaled that it would raise interest rates in 2023 to tame rising inflation, which prompted a stronger US dollar and discouraged cheap dollar oil trade.
After the rate cut, the US dollar index, which includes a basket of currencies like the euro, Japanese yen, British pound, Canadian dollar, Swedish krona, and Swiss franc, closed Wednesday with a 0.96% rise. The index was up 0.33% at 0620 GMT on Thursday.
Oil prices also came under pressure after the US Energy Information Administration (EIA) announced Wednesday that the country’s gasoline inventories rose by 2 million barrels, or 0.8%, during the week ending June 11, indicating lower demand.
Crude oil inventories, however, decreased by 7.4 million barrels, or 1.6%, during this period.