Oil Prices Head for Weekly Dip as Dollar Strengthens

Oil prices fell on Friday, wiping out gains from the previous session, as the dollar continued to gain on bets the US central bank will bring forward plans to raise rates to tame inflation.
US West Texas Intermediate crude futures fell 61 cents, or 0.8%, to $80.98 a barrel, reversing Thursday's 25 cent gain. Brent crude futures dropped 65 cents, or 0.8%, to $82.22 per barrel, Reuters reported.
Both benchmark crude contracts were poised to end the week lower after sharp moves up and down, driven by a soaring dollar and speculation on whether the Biden administration might release oil from the US Strategic Petroleum Reserve to cool prices.
While the market is tightly supplied, the bigger issue is the change in the demand dynamic, as the market moves away from a strong recovery driven by a revival in demand for goods, which has stoked energy demand, toward a recovery in demand for services.
There are positive signs on the demand side, with air travel rapidly picking up, but tighter monetary and fiscal policy and the oncoming northern hemisphere winter will act as a dampener.
The Organization of Petroleum Exporting Countries on Thursday cut its world oil demand forecast for the fourth quarter by 330,000 barrels per day from last month's forecast, as high energy prices curb the recovery from Covid-19.
OPEC member states, Russia and allies, together called OPEC+, agreed last week to stick to plans to add 400,000 barrels per day to the market each month.