Oil prices drop again after rebound as dollar strengthens, demand weakens

(Reuters) – Oil prices fell on Thursday after gaining more than $3 in the prior session, with a strong dollar capping oil demand and concerns over the faltering global economic outlook clouding market sentiment.

Brent crude futures fell 91 cents, or 1%, to $88.41 per barrel by 0629 GMT, while U.S. crude futures dropped by 80 cents, or 1%, to $81.33.

Both benchmarks had rebounded in the prior two sessions, after reaching nine-month lows this week, after a temporary dive in the dollar index and a larger-than-expected drawdown of U.S. fuel inventory raised hopes of a consumer demand recovery.

However, the dollar index trended upward again on Thursday, dampening investor risk appetite and stoking fears of a global recession.