US crude dropped to below $85 today as concerns about US demand re-emerged and the dollar strengthened, making imports more expensive for emerging economies where consumption is surging.
An unexpected jump in the weekly number of US workers filing new jobless benefit claims tempered sentiment across markets yesterday.
US crude for May delivery fell 83 cents to $84.68 a barrel earlier, more than $2 lower than an18-month high above $87 reached last week. The dollar gained about 0.2 per cent against a basket of currencies.
The dollar found support after the Treasury Department said foreign purchases of US securities rose in February as strong private sector demand helped reverse an overall capital outflow suffered during the prior month.
Strong economic data out of China painted a different outlook for demand across Asia, giving relative support to prices of London-traded ICE Brent crude, the benchmark for most of the oil produced in Europe, Africa and Asia.
Soaring growth in the Chinese economy, which posted annual expansion of 11.9 per cent in the first quarter, could prompt a revaluation of the yuan, which may boost oil demand by increasing China's buying power.
Reuters