Oil prices retreated slightly on Thursday after gaining more than $3 in the prior session, with a strong dollar capping oil demand from buyers using other currencies and concerns over the faltering economic outlook clouding market sentiment.
Brent crude futures fell 41 cents, or 0.5%, to $88.91 per barrel by 0337 GMT while U.S. crude futures dropped by 35 cents, or 0.4%, to $81.80. Both benchmarks had rebounded in the prior two sessions after reaching nine-month lows this week after a temporary dive in the dollar index and a larger-than-expected drawdown of U.S. fuel inventory raised hopes of a consumer demand recovery.
However, the dollar index trended upward again on Thursday, dampening investor risk appetite and stoking fears of a global recession.
The Bank of England said it is committed to buying as many long-dated government bonds, know as gilts, as needed between Wednesday and Oct. 14 to stabilise its currency after the British government’s budgetary plans announced last week caused the sterling to tumble. [REUTERS]