- The U.S. dollar’s strength and prospects of weaker global demand drove down the price of oil by more than 2% on Monday, although supply concerns held down the slide.
- This week, borrowing costs will climb across the board thanks to central banks, and there is a chance that the U.S. Federal Reserve may raise rates by an unexpectedly large 1 percentage point.
- Prices are being restrained by the approaching Fed meeting and the strong dollar, according to oil broker PVM’s Tamas Varga.
- West Texas Intermediate (WTI) for October fell 2%, to $83.56 by 10:20 GMT.
Oil prices have risen significantly in 2022, with Brent nearly reaching its record high of $147 in March after Russia’s invasion of Ukraine increased supply worries.
Since then, prices have decreased due to concerns about decreasing demand and economic development.
Ahead of the Fed and other central banks’ announcements later this week, the U.S. dollar remained close to a two-decade high. Oil and other risky assets typically suffer when the dollar is stronger because it makes commodities denominated in dollars more expensive for owners of other currencies.
Forecasts for weaker demand, such as the International Energy Agency’s forecast last week that the fourth quarter would see no growth in demand, have also put pressure on oil prices.
Despite those worries, supply concerns kept the decline in check.