Oil prices turned lower on Monday as the U.S. dollar strengthened and as investors mulled over a possible May interest rate hike by the U.S. Federal Reserve, which could dampen economic recovery hopes.
Brent crude futures fell $1.55, or 1.8%, to settle at $84.76 a barrel, while U.S. West Texas Intermediate crude dropped $1.69, or 2.1%, at $80.83 a barrel.
Both contracts notched their fourth weekly gain in a row last week, the longest such streak since mid-2022.
The U.S. dollar has been strengthening alongside interest rate hikes, making dollar-denominated oil more expensive for holders of other currencies. The dollar index gained around 0.6% on Monday.
"The dollar is a little bit stronger, and that seems to be putting a little bit of pressure on oil here," Price Futures Group analyst Phil Flynn said.
Traders are betting the Fed will raise its lending rate in May by another quarter of a percentage point and have pushed out to late this year expectations of a rate cut, as typically occurs in a slowdown.
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