Oil prices fall amid strong dollar, economic concerns

Oil prices fell in early Asian trade on Thursday as a strong dollar and economic woes outweighed optimism over consumer demand.

Brent crude futures fell 59 cents, or 0.7 percent, to $88.73 per barrel by 0016 GMT while U.S. crude futures fell by 54 cents, or 0.7 percent, to $81.59. Both benchmarks rebounded in the prior two sessions amid volatile trade after reaching nine-month lows this week.

The dollar trended upward on Thursday morning, after hitting a fresh two-decade peak against a basket of currencies on Wednesday before pulling back. A strong dollar reduces demand for oil by making it more expensive for buyers using other currencies.

The Bank of England said it is committed to buying as many long-dated government bonds, know as gilts, as needed between Wednesday and Oct. 14 to stabilise its currency after the British government’s budgetary plans announced last week caused the sterling to tumble.

As markets tried to digest what the move meant for the pound, the currency whipsawed during Wednesday’s session, jumping as high as $1.09165 and falling as low as $1.05390. It was last up 1.51 percent at $1.08921.

Goldman Sachs cut its 2023 oil price forecast on Tuesday, due to expectations of weaker demand and a stronger U.S. dollar but said global supply disappointments only reinforced its long-term bullish outlook.