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Oil pared its weekly advance, with prices erasing early gains as renewed concerns over financial sector stability buoyed the dollar, making commodities priced in the US currency less attractive.
West Texas Intermediate slumped below $70 a barrel after the dollar’s jump on a broader decline in risk appetite. The US crude benchmark has advanced by less than $3 a barrel, while the US currency has lost less than 1%. Oil’s weekly gain follows a significant decline as banking crises flared.
Crude remains on course for its steepest first-quarter drop since 2020, when the pandemic eviscerated demand. That slump has been driven by a potential US recession, robust Russian flows despite Western sanctions, and strikes at refineries in France.
Still, after the Federal Reserve hiked interest rates again, more investors are betting that its tightening campaign is now close to an end, hurting the US currency.
As crude rose, serial commodities bull Goldman Sachs again made the case that it will do well this year as part of a broader commodity rally.