Oil prices fell in early Asian trading as the strength of the dollar and economic issues overshadowed optimism about consumer demand. Brent crude futures dropped by 59 cents, or 0.7%, to $88.73 per barrel by 00:16 GMT, while U.S. crude futures fell by 54 cents, or 0.7%, to $81.59. Both benchmarks had seen gains in the previous two sessions amid trading volatility after hitting a nine-month low earlier this week.
The dollar index showed an upward trend this morning, after reaching a two-decade high against a basket of currencies on Wednesday before retreating. A strong dollar reduces demand for oil, making it more expensive for buyers using other currencies. The Bank of England stated it is committed to purchasing as many long-term government bonds, known as "golden bonds," as needed between Wednesday and October 14 to stabilize its currency after the UK government's budget plans announced last week caused the pound to drop.
Goldman Sachs lowered its oil price forecasts for 2023 on Tuesday due to expectations of weak demand and a strong U.S. dollar, but noted that global disappointment regarding supplies has bolstered its long-term bullish outlook.
