Oil prices tumbled on Thursday as a rebounding dollar and Kuwait’s stance that OPEC had no choice but to keep producing in an oversupplied market undercut the previous day’s rally.
Benchmark Brent oil settled down nearly 3 percent while U.S. crude lost almost 2 percent, weighed by the dollar’s rise against most currencies.
In the previous session, Brent rose nearly 5 percent and U.S. crude about 3 percent as the dollar suffered its biggest one-day tumble in 18 months on disappointment over the lack of a clear timeline for a U.S. interest rate hike. [USD/]
“It’s dollar play all over again today,” said Phil Flynn, analyst at the Price Futures Group in Chicago. “The fact that the oil market is oversupplied is a given, so the only real variable now are currency moves and how they impact commodities demand.”
A stronger dollar weakens demand from holders of other currencies for commodities denominated in the greenback. The reverse is the case when the dollar declines.
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