By Florence Tan
SINGAPORE (Reuters) – Oil prices fell in early Asian trading on Monday for a second straight session, pressured by a stronger dollar after concerns about longer-term higher interest rates resurfaced and cooled appetite for the investor risk.
Futures fell 40 cents, or 0.5%, to $84.84 a barrel by 0036 GMT, after being down 0.6% on Friday. U.S. West Texas Intermediate crude futures were trading at $80.34 a barrel, down 39 cents, or 0.5%.
“The US dollar opened its bid this morning and appears to have rallied following better US PMI data on Friday night and political concerns ahead of the French election,” said Sydney-based IG markets analyst Tony Sycamore.
A stronger dollar makes dollar-denominated commodities less attractive to holders of other currencies.
However, both benchmark crude contracts gained about 3% last week on signs of stronger demand for oil products in the US, the world’s largest consumer, and as OPEC+ cuts kept the supply under control.
Inventories fell while gasoline demand rose for a seventh consecutive week and jet fuel consumption returned to 2019 levels, ANZ analysts said in a note.
Geopolitical risks in the Middle East stemming from the Gaza crisis and increased Ukrainian drone attacks on Russian refineries are also propping up oil prices.
In Ecuador, state oil company Petroecuador declared force majeure on deliveries of Napo heavy crude for export after the closure of a key pipeline and oil wells due to heavy rains, sources said Friday.
In the United States, operating oil rigs fell three to 485 last week, their lowest level since January 2022, Baker Hughes said in its report on Friday.