Oil prices fell about 1% this Friday, to a three-week low, due to the appreciation of the US dollar and after the Federal Reserve (Fed) kept the interest rate unchanged, as expected, although keeping the door open for possible future increases.
Interest rate increases can slow economic growth and reduce demand for oil. A strong dollar makes it more expensive to buy fuel using other currencies, which puts pressure on commodity prices.
Brent crude futures fell 39 cents, or 0.5%, to $84.63 a barrel. West Texas Intermediate (WTI) crude futures fell 58 cents, or 0.7%, to $80.44.
It was the lowest close for Brent since October 6th and for WTI since August 28th. Both contracts closed the session below their 100-day moving averages, an important level of technical support.
Negotiations were frenetic on Wednesday. Both contracts rose more than $2 a barrel early in the session amid concerns over the situation in the Middle East.
The Fed, which began raising interest rates in March 2022, kept the base rate stable but left the door open to a new increase due to the strength of the U.S. economy.
The US dollar rose to four-week highs against a basket of other currencies.
Crude oil futures were also pressured by rising U.S. crude and gasoline inventories last week.
Source: Terra
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