Oil prices dropped for a second consecutive day on Friday as the U.S. dollar soared on the prospect of interest rate hikes in the United States.
Nevertheless, oil prices are well on track to finish the week flat — only slightly off multi-year highs.
Brent crude futures were down 52 cents, or 0.7%, at $72.56 a barrel as of 03:30 WAT, extending a 1.8% decline on Thursday.
U.S. West Texas Intermediate (WTI) crude futures were down 48 cents, or 0.7%, at $70.56 a barrel, after retreating 1.5% on Thursday.
On Wednesday, Brent settled at its highest price since April 2019 while WTI settled at its highest since October 2018.
The dollar has rocketed in the two sessions since the U.S. Federal Reserve projected possible rate hikes in 2023, earlier than market watchers previously expected. A rising dollar makes oil more expensive in other currencies, curbing demand.
Oil prices also fell after Britain on Thursday reported its biggest daily rise in new cases of COVID-19 since Feb. 19, with government figures showing 11,007 new infections versus 9,055 a day earlier.
Adding to negative sentiment were remarks from Iran's top negotiator on Thursday saying talks between Tehran and Washington on reviving the 2015 Iran nuclear deal have come closer than ever to an agreement.
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