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Brent crude oil futures dropped 33 cents, or 0.4%, to $74.06 a
barrel by 0836 GMT. They hit their highest since April 2019 in
the previous session.
U.S. crude oil futures inched down 28 cents, or 0.3%, to $71.87
a barrel, after reaching their highest since October 2018 the
previous day.
The U.S. dollar boasted its strongest single day gain in 15
months after the Federal Reserve signalled it might raise
interest rates at a much faster pace than assumed.
A firmer greenback makes oil priced in dollars more expensive in
other currencies, potentially weighing on demand.
"Energy markets became so fixated over a robust summer travel
season and Iran nuclear deal talks that they somewhat got
blindsided by the Fed's hawkish surprise," said Edward Moya,
senior market analyst at OANDA.
"This pullback in oil prices should be temporary as the
fundamentals on both the supply and demand side should easily be
able to compensate for a rebounding dollar," Moya said.
Still, oil price losses were limited as data from the Energy
Information Administration showed that U.S. crude oil stockpiles
in the world's biggest consumer dropped sharply last week as
refineries boosted operations to their highest since January
2020, signalling continued improvement in demand. [EIA/S]
Also boosting prices, refinery throughput in China, the world's
second largest oil consumer, rose 4.4% in May from the same
month a year ago to a record high.
The world's biggest oil traders said this week they saw oil
prices staying above $70 a barrel with demand expected to return
to pre-pandemic levels in the second half of 2022.
(Additional reporting by Jessica Jaganathan;Editing by Elaine
Hardcastle)
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