Oil Falls as Russia Says OPEC+ to Hold Steady, Stronger Dollar

(Bloomberg) — Oil’s three-day rally hit a wall after Russia downplayed the likelihood of another OPEC+ production cut.

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The Organization of Petroleum Exporting Countries and its allies are unlikely to take any new steps, Russian Deputy Prime Minister Alexander Novak said in an interview Thursday with Izvestia. West Texas Intermediate fell the most in two weeks to trade below $72 a barrel, erasing earlier gains sparked by a warning from Saudi Arabia on Tuesday that oil market short-sellers should “watch out.”

A stronger dollar also weighed on oil prices, making commodities priced in the US currency less attractive.

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Crude futures are down about 9% this year, with China’s muted economic rebound and tighter US monetary policy combining to weigh on prices. Federal Reserve officials are leaning toward pausing interest rate hikes in June, while signaling they’re not yet ready to end their fight against inflation. Citigroup Inc. cast doubt on previous oil demand growth forecasts, saying “multiple signs” suggest it’s unlikely to come close.

Meanwhile in Washington, the standoff over a US debt deal has roiled markets in recent weeks. Fitch Ratings placed the country’s AAA credit rating on watch — a sign of growing unease about the nation’s ability to avert a first-ever default — hours after House Speaker Kevin McCarthy said there was still time to get an agreement.

(Russian Deputy Prime Minister Alexander Novak)

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