Today, oil prices fell as the US dollar showed significant strengthening and limited crude oil demand in the market despite increasing supply disruptions amid the Middle East conflict.
Both benchmarks showed declines with Brent crude down 36 cents (0.5%) to $77.93 a barrel. US West Texas Intermediate crude fell 43 cents (0.59%) to $71.97 for now.
Yesterday, Brent crude rose slightly while WTI fell since the start of the week as investors saw some signs of weakness in the US economy. However, the war conflict in the Red Sea continues to increase and worry the tankers sailing there.
The problem forced the ships to change course further and increased costs and extended delivery times.
The US dollar is now moving higher since Monday after remarks from US Federal Reserve officials who dismissed expectations of aggressive interest rate cuts. It can also reduce demand for crude oil in dollar denominated for buyers paying in other currencies.
Earlier this week, the United States launched an attack on the Iran-allied Houthi group in Yemen after a Houthi missile struck a Greek ship in the Red Sea.
Major British oil producer Shell suspended shipments through the Red Sea after attacks from the US and UK began. However, US oil producer Chevron still uses the route.
Although the conflict did not affect the crude oil market. Prices will continue to be affected due to disruptions to trade flows through the Red Sea and the Suez Canal which increase costs.
