Oil prices head for weekly dip as dollar firms | Reuters

Oil prices head for weekly dip as dollar firms | Reuters

Oil prices fell on Friday, wiping out gains from the previous session as the dollar continued to firm on expectations that the U.S. central bank will bring forward an increase to interest rates in an effort to tame inflation.

Brent crude futures dropped 86 cents, or 1%, to $82.01 a barrel by 1325 GMT and U.S. West Texas Intermediate (WTI) crude was down $1.01, or 1.2%, at $80.58.

Both benchmark crude contracts were poised to end the week with their third weekly fall in a row after sharp swings driven by a strengthening dollar and speculation on whether the Biden administration might release oil from the U.S. Strategic Petroleum Reserve to cool prices.

There are positive signs on the demand side, with air travel picking up rapidly, but tighter monetary and fiscal policy and the looming northern hemisphere winter will act as a dampener.