LONDON: Brent oil fell on Thursday to near $108 a barrel as a strengthening dollar undercut expectations for rising demand after a third weekly drawdown in US crude stocks.
The US dollar rose versus a basket of currencies, extending overnight gains after US Federal Reserve Chairman Ben Bernanke reiterated plans to roll back economic stimulus by year's end, weighing on commodity prices.
A stronger dollar makes greenback-traded commodities more expensive for holders of foreign currencies.
Brent crude was down 43 cents at $108.18 a barrel by 0945 GMT. U.S oil was down 11 cents to $106.37.
Oil was supported after data showed refiners in the United States had consumed the highest amount of crude since August 2005.
"The sharp drawdown in inventories is a big factor for oil markets as it shows refiners in the United States are processing more crude," said Ken Hasegawa, a commodity sales manager at Newedge Japan.
US crude oil inventories slumped almost 7 million barrels last week, according to data from the US Energy Information Administration (EIA), adding to the near 20 million barrel draw in the two previous weeks.
US capacity to refine crude remained close to all-time highs reached in April.
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