Sat, 03 Jun 2023

NEW YORK, May 18 (Xinhua) -- Crude oil futures prices retreated on Thursday due to concerns over the possibility of further interest rate hikes and a strong U.S. dollar.

The West Texas Intermediate (WTI) for June delivery lost 0.97 U.S. dollars, or 1.33 percent, to settle at 71.86 dollars a barrel on the New York Mercantile Exchange. Brent crude for July delivery decreased by 1.10 dollars, or 1.43 percent, to settle at 75.86 dollars a barrel on the London ICE Futures Exchange.

Increasing probability of another rate hike by the Federal Reserve in June dampened market sentiment and oil demand prospects.

Good news for the economy is now bad news for the crude demand outlook as economic resilience will force the Fed to kill the economy, said Edward Moya, senior market analyst at OANDA, a supplier of online multi-asset trading services.

U.S. new jobless claims dipped to 242,000 in the week ending May 13, down from 264,000 in the previous week and lower than the forecast consensus of 255,000, according to data issued by the U.S. Department of Labor on Thursday.

The Federal Open Market Committee has around 36 percent probability of raising federal fund rates by another 25 basis points in June, higher than the 28.4 percent probability on Wednesday and 10.7 percent a week ago, according to data shown by the CME FedWatch Tool on Thursday afternoon.

Meanwhile, the U.S. dollar advanced on Thursday with the dollar index rising more than 0.6 percent.

"Oil is becoming an easy trade, as it will track the dollar and not so much anything else," added Moya.

WTI oil pulled back as traders focused on the U.S. dollar's rally, which put material pressure on commodities, said Vladimir Zernov, analyst with market information supplier FX Empire.

More Beijing News

Access More

Sign up for Beijing News

a daily newsletter full of things to discuss over drinks.and the great thing is that it's on the house!