New York September 6 2023: Oil prices fell below $90 a barrel on Wednesday, after rising over 1% the previous session, on a stronger dollar and after strong economic data renewed concerns over high interest rates.
Brent crude futures fell by 50 cents to $89.56 a barrel at 11:07 a.m. EDT (1607 GMT). U.S. West Texas Intermediate crude (WTI) futures traded at $86.58 a barrel, down 31 cents.
Against a basket of currencies, the dollar was at 104.98, above the six-month high of 104.90 touched overnight. A stronger dollar can weigh on oil demand by making the fuel more expensive for holders of other currencies.
Fueling rate-hike concerns and denting investor sentiment, data on Wednesday showed the ISM non-manufacturing Purchasing Managers’ Index (PMI) came in at 54.5, compared with expectations of 52.5.
“This is fuelling worries about interest rates staying higher for longer, and what does that mean for demand,” said John Kilduff, partner at Again Capital LLC in New York.
Saudi Arabia and Russia on Tuesday extended their voluntary oil cuts to the end of the year, the former to the tune of 1 million barrels per day (bpd) and the latter by 300,000 bpd. These are on top of the April cut agreed by several OPEC+ producers running to the end of 2024.
