Crude oil prices hovered near multi-year highs on Thursday buoyed by dropping U.S. crude inventories and broadly shrugging off a stronger U.S. dollar.
Brent crude oil futures dropped 20 cents, or 0.2%, to $74.19 a barrel by 1156 GMT. They hit their highest since April 2019 in the previous session.
U.S. crude oil futures inched down 13 cents, or 0.1%, to $72.02 a barrel, after reaching their highest since October 2018 the previous day.
The U.S. dollar boasted its strongest single day gain in 15 months after the Federal Reserve signaled it might raise interest rates at a much faster pace than assumed.
A firmer greenback makes oil priced in dollars more expensive in other currencies, potentially weighing on demand.
Data from the Energy Information Administration showed that U.S. crude oil stockpiles in the world’s biggest consumer dropped sharply last week as refineries boosted operations to their highest since January 2020, signaling continued improvement in demand.
Also boosting prices, refinery throughput in China, the world’s second largest oil consumer, rose 4.4% in May from the same month a year ago to a record high.
The world’s biggest oil traders said this week they saw oil prices staying above $70 a barrel with demand expected to return to pre-pandemic levels in the second half of 2022.
Iran is heading to presidential polls on Friday, with hardline judiciary chief Ebrahim Raisi among the front runners.
“The outcome of tomorrow’s presidential elections in Iran is also likely to lend support to the oil price… Any rapid return of Iranian oil exports is questionable,” Commerzbank said in a note.
(Additional reporting by Jessica Jaganathan; editing by Elaine Hardcastle and Jason Neely)