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U.S. Oil Benchmark Falls from 22Month High as Dollar Rises

Oil futures saw significant pressure Friday, with the U.S. benchmark pulling back from a 22month high, as a rise by the U.S. dollar and jitters ahead of next weeks meeting of the Organization of the Petroleum Exporting Countries and its allies appeared to prompt a round of profittaking.

A jump in U.S. Treasury yields on Thursday triggered global equity market jitters, while also lifting the U.S. dollar. A stronger dollar can be a negative for commodities, making them more expensive to users of other currencies.

The domino effect is starting to hit commodities like oil, triggered by a correction in the reflation trade due to higher U.S. yields that are becoming a significant source of market volatility, said Stephen Innes, chief global markets strategist at Axi, in a note.

West Texas Intermediate crude for April delivery fell 1.57, or 2.5, to 61.96 a barrel on the New York Mercantile Exchange, after posting its highest frontmonth close since May 1, 2019, on Thursday. May Brent crude, the global benchmark, was down 1.50, or 2.3, at 64.61 a barrel on ICE Futures Europe.

The ICE U.S. Dollar Index a measure of the U.S. currency against a basket of six major rivals, was up 0.5.

OPEC ministers are scheduled to meet next week to discuss production curbs. Compliance with the groups existing limits on output, along with Saudi Arabias unilateral decision to cut production by 1 million barrels a day in February and March, have been seen as a significant contributor to the 2021…

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