NEW YORK: Oil prices turned lower on Monday as the US dollar strengthened and as investors mulled over a possible May interest rate hike by the US Federal Reserve, which could dampen economic recovery hopes.

Brent crude futures fell $1.75, or 2%, at $84.56 a barrel at 12:54 p.m. EDT (1654 GMT), while US West Texas Intermediate crude dropped $1.83, or 2.2%, at $80.69 a barrel.

Both contracts notched their fourth weekly gain in a row last week, the longest such streak since mid-2022.

The US dollar has been strengthening alongside interest rate hikes, making dollar-denominated oil more expensive for holders of other currencies. The dollar index gained around 0.6% on Monday.

“The dollar is a little bit stronger, and that seems to be putting a little bit of pressure on oil here,” Price Futures Group analyst Phil Flynn said.

Traders are betting the Fed will raise its lending rate in May by another quarter of a percentage point and have pushed out to late this year expectations of a rate cut, as typically occurs in a slowdown. Meanwhile, the release of China’s first-quarter gross domestic product (GDP) data at 0200 GMT on Tuesday is expected to be positive for commodity prices, with the International Energy Agency (IEA) forecasting it will account for most of 2023 demand growth.

However, the IEA also warned in its monthly report that output cuts announced by OPEC+ producers risked exacerbating an oil supply deficit expected in the second half of this year and could hurt consumers and a global economic recovery.

The Group of Seven (G7) coalition will keep a $60 per barrel price cap on seaborne Russian oil, a coalition official said, despite rising global crude prices and calls by some countries for a lower price cap to restrict Moscow’s revenues.

In Saudi Arabia, crude oil exports in February fell to 7.455 million bpd from 7.658 million bpd in January, official data showed on Monday.