Crude prices declined to $111 a barrel on Thursday as the dollar gained strength against the euro, easing demand for commodities.
The U.S. currency rallied when the U.S. Federal Reserve cut interest rates by a quarter percentage point yesterday. On Thursday gold and metals also declined as the dollar rose to $1.5442 against the euro at 11:19 a.m. compared to yesterday's record of $1.5622. The dollar reached as much as $1.5437 today.
The declines in the dollar have prompted higher demand for raw materials and commodities. Gold, copper and rice have risen to new record highs.
Crude oil futures for June delivery fell $2.35 or 2.07 percent to $111.11 a barrel on the New York Mercantile Exchange at 12:24 p.m.
Crude prices soared to $119.93 earlier this week however they began to fall on Tuesday and yesterday losses extended as the Energy Department reported U.S. crude inventories rose more than expected on the week ended April 25.
In Nigeria, Exxon Mobil Corp. is holding talks to put an end to a labor strike that has reduced crude production by 860,000 barrels a day. The company reached a deal with a Nigerian oil union yesterday, a union leader said according to Reuters.
Exxon Mobil said in a statement that it had started the process of resuming its Nigerian output, Reuters reported.
Some data raised concerns that demand of crude may be slowing. Today the U.S. Labor Department said that first-time claims for unemployment insurance rose to 380,000 more than expected in the previous week.
London Brent crude for June delivery fell $2.48 or 2.25 percent to $108.12 a barrel on the ICE Futures Exchange.