MELBOURNE, June 18 (Reuters) – Oil prices fell for a second straight session on Friday as the US dollar soared amid the prospect of an interest rate hike in the United States, but they were on the way to end the week little changed and slightly behind the multi-year summits.

Brent crude futures fell 86 cents, or 1.2%, to $ 72.22 a barrel at 1220 GMT. US West Texas Intermediate (WTI) crude futures fell 84 cents, or 1.2%, to $ 70.20 a barrel.

Brent settled at its highest price since April 2019 on Wednesday, while WTI settled at its highest since October 2018.

“The formidable strength of the US dollar following the Fed’s hawkish turn dominates the oil market as the weekend approaches,” said Sophie Griffiths, market analyst at OANDA.

“The uptrend in oil remains intact, thanks to the optimism surrounding the outlook for demand. The dollar may well strengthen but the fundamental picture of oil has not changed,” she added.

An oil tanker is seen at the port of Qingdao, Shandong province, China on April 21, 2019. REUTERS / Jason Lee / File Photo

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The dollar has soared in both sessions since the U.S. Federal Reserve predicted possible rate hikes in 2023, earlier than expected by market watchers. A rising dollar makes oil more expensive in other currencies, dampening demand.

The prospect of rate hikes has also weighed on the long-term growth outlook, which would ultimately hurt demand for oil, unlike the short-term demand growth outlook as pandemic lockdowns ease and markets break down. Road and air travel are picking up, said Westpac’s senior economist. Justin Smile.

“The short term is very positive. The question is how far it can go further,” said Smirk.

Oil prices also fell after Britain on Thursday reported its biggest daily increase in new COVID-19 cases since February 19, with government figures showing 11,007 new infections compared to 9,055 a day earlier. Read more

Remarks by Iran’s top negotiator on Thursday added to the negative sentiment, saying that talks between Tehran and Washington on relaunching the 2015 Iran nuclear deal were closer than ever to a deal. Read more

Reporting by Sonali Paul; Editing by Christopher Cushing

Our standards: Thomson Reuters Trust Principles.

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