Oil prices at a three-week low as a strong dollar, rate hikes weigh

Crude oil storage tanks are seen in an aerial photograph at the Cushing oil hub in Cushing, Oklahoma, U.S. REUTERS/Drone Base

By Shadia Nasralla

LONDON (Reuters) – Oil prices fell to their lowest in about three weeks on Thursday, depressed by a firmer dollar and rate hike expectations which outweighed lower U.S. crude stocks.

Brent crude futures were down $1.12, or 1.4%, to trade at $82.00 a barrel at 0819 GMT. West Texas Intermediate crude (WTI) futures dropped $1.02, or 1.3%, to $78.14 a barrel.

Both benchmarks, following a 2% fall on Wednesday, are at their lowest since late March, just before a surprise OPEC+ production cut announcement, although not all gains from that move have been wiped out yet.

The U.S. dollar index has moved up around 0.3% this week so far, on course for its strongest week since late February. A strengthening greenback makes oil more expensive for holders of other currencies.

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U.S. economic activity was little changed in recent weeks, according to a Federal Reserve report.

Fed policymakers have signalled they are nearing the end of what has been the most aggressive spate of policy tightening in 40 years, with most pencilling one last quarter-percentage-point hike.

On the other side of the Atlantic, persistent double-digit inflation in Britain has bolstered expectations of a further Bank of England rate hike.

Meanwhile, U.S. crude stockpiles fell by 4.6 million barrels as refinery runs and exports rose, while gasoline inventories jumped unexpectedly on disappointing demand, according to the U.S. Energy Information Administration (EIA). [EIA/S]

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The crude stockpile decline was far steeper than analysts’ and the American Petroleum Institute’s estimates. [API/S]

On the supply side, oil loading from Russia’s western ports in April is likely to rise to the highest since 2019, despite Moscow’s pledge to cut output, trading and shipping sources said.

Pakistan has placed its first order for discounted Russian crude under a new deal which could cover 100,000 barrels per day, the country’s petroleum minister said.

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