Oil prices fell on Friday as a collapse in bond prices led to gains in the U.S. dollar and expectations grew that with oil prices back above pre-pandemic levels, more supply is likely to return to the market.
U.S. West Texas Intermediate (WTI) crude futures dropped 96 cents, or 1.5%, to $62.57 a barrel at 0804 GMT, giving up all of Thursday’s gains.
Brent crude futures for April, which expire on Friday, fell 86 cents, or 1.3%, to $66.02 a barrel, following a 16 cent loss on Thursday.
The more actively traded May contract slipped to as low as $65.04 a barrel earlier and was down 93 cents, or 1.4%, at $65.18.
“Crude oil retreated modestly from recent highs amid a ‘risk off’ sentiment as Asia-Pacific equities pulled back broadly following a sour lead from Wall Street,” said Margaret Yang, a strategist at Singapore-based DailyFX.
The sell-off in bond markets, leading to a stronger U.S. dollar and rising yields, are weighing on commodities, which are non-yielding, she added.
A stronger greenback makes U.S.-dollar priced oil more expensive for those buying crude in other currencies.