Thursday, prices of oil plummeted as the U.S. dollar continues to extend its recovery from last week. The United States West Texas Intermediate crude futures settled at $61.12 per barrel, which was down by 0.9% or 56 cents from their previous settlement, while the international benchmark: Brent crude futures, settled at $64.92 per barrel, which was 0.8% or 50 cents lower from their last close.
As oil trading is conducted basically with the use of the U.S. currency, a rise in the dollar makes fuel imports for countries using different currency expensive, restraining demand, leading to oil prices experiencing a decline.
In addition, Stephen Innes, head of trading for Asia-Pacific at OANDA mentioned that the recovering dollar is preventing investor sentiment despite the assertive crude inventory data.
In addition, the recovering greenback also cancelled out a report from API which indicated a fall in U.S. crude inventories. According to a report showed by the API or the American Petroleum Institute on Wednesday, U.S. crude oil inventories indicated a sudden fall of 907,000 barrels to 420.3 million for the week to February 16, 2018.