Oil tumbles 3% from multi-year highs

SINGAPORE:

Oil prices slumped nearly 3% from their highest level in years on Thursday as the US dollar strengthened after the Federal Reserve signalled it might raise interest rates as soon as 2023 and hopes the United States and Iran could come to a nuclear agreement.

But an upcoming election in Iran on Friday could scuttle the nuclear talks and leave US sanction on Iran’s oil exports in place.

Brent futures fell $2.07, or 2.8%, to $72.32 a barrel by 16:22 GMT, while US crude fell $2.00, or 2.8%, to $70.15.

On Wednesday, Brent settled at its highest since April 2019 and WTI at its highest since October 2018.

The US dollar strengthened to its highest since mid-April against a basket of other currencies after the Federal Reserve signalled it might raise interest rates at a much faster pace than assumed.

A firmer greenback makes oil more expensive in other currencies, which could dent demand.

Published in The Express Tribune, June 18^h, 2021.

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