WASHINGTON, Sep 15 – PRIME. Oil futures fell about 4% on Thursday to a 7-day low amid a deal in the US that avoided a railroad strike. In addition, prices are under pressure due to expectations of weakening global demand and a strengthening dollar ahead of a likely significant increase in interest rates by the Fed, Reuters reported.
Around 1050 GMT, Brent futures fell $3.75, or 4%, to $90.35 a barrel. WTI futures fell $3.58, or 4.1%, to $84.90 a barrel.
Quotes of both grades of oil are aimed at closing lows since September 8.
U.S. railroads and unions have reached a tentative agreement that is likely to avoid a supply freeze, people familiar with the matter said.
The threat of a strike provided little support to the market on Wednesday.
A tentative agreement between railroad companies and labor unions sent US diesel and gasoline futures down more than 5% during the session.
“Oil is getting cheaper as the dollar strengthens and a preliminary deal is likely to help avoid a U.S. railroad strike,” analysts at Ritterbusch and Associates said, noting shrinking crack spreads.
The crack spread could narrow to its lowest close since the end of February.
The dollar remains near a 20-year high reached on September 6 on expectations that the Fed will continue to actively raise interest rates.
Other negative factors for the oil market are the growth of oil reserves in the US vaults and the expected reduction in the energy consumption of the Ethereum blockchain.