Oil prices fell by about 1% on Thursday, after strong U.S. economic data boosted the dollar to its highest level in two months, amidst growing expectations that the Federal Reserve will raise interest rates again in June. Brent crude futures dropped by 1.4% to settle at $75.86 per barrel. West Texas Intermediate (WTI) crude fell by 1.3% to settle at $71.86.
The dollar climbed to its highest level since March 17 against a basket of currencies, following data showing lower-than-expected new claims for unemployment assistance and optimism regarding a potential deal on the debt ceiling.
A stronger dollar can reduce demand for oil, as it makes it more expensive for holders of other currencies. Higher interest rates increase borrowing costs, which could slow down the economy and reduce oil demand.
