Oil prices dropped more than $1 a barrel Wednesday after jumping higher in the previous session
Oil prices dropped more than US$1 a barrel Wednesday after jumping higher in the previous session on the expectation that another cut in U.S. Federal Reserve interest rates would further weaken a battered dollar.
The Fed said Tuesday it was lowering its key federal funds rate by three-quarters of a percentage point as it tries to stave off a severe economic crisis. Many investors expected a full point cut, but the Fed indicated it was concerned about higher inflation even as it was trying to shore up the economy.
Light, sweet crude for May delivery dropped 56 cents to US$101.98 a barrel in Asian electronic trading on the New York Mercantile Exchange by midday in Singapore. The contract fell US$5.96 to settle at US$102.54 a barrel on Wednesday.
Crude for April delivery declined US$4.94 to settle at US$104.48 a barrel before expiring.