Investing.com -
Investing.com - West Texas Intermediate and Brent oil futures both dropped to multi-week lows on Thursday, as the U.S. dollar rallied after the European Central Bank cuts its deposit rate below zero and said additional steps would include targeted long-term loans.
On the New York Mercantile Exchange, U.S. crude oil for delivery in July fell to a session low of $101.61 a barrel, the weakest level since May 21, before trimming losses to last trade at $101.75 during U.S. morning hours, down 0.86%, or 88 cents.
New York-traded oil futures were likely to find support at $101.52 a barrel, the low from May 19 and resistance at $103.69 a barrel, the high from June 4.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for July delivery dipped 0.49%, or 54 cents, to trade at $107.87 a barrel, while the spread between the Brent and U.S. crude contracts stood at $6.12 a barrel.
The European Central Bank cut its benchmark interest rate to a record-low 0.15% from the 0.25% rate held since November earlier in the day.
The central bank also cut its marginal lending rate to 0.40% from 0.75% and lowered its deposit facility rate to -0.10% from 0.0%, thereby charging commercial banks for deposits parked overnight with the central bank.
Speaking at the ECB's post-policy meeting press conference, Draghi outlined a number of other liquidity-boosting measures, including a targeted long term loan program and ending bond purchase sterilizations. Draghi added that the central bank was preparing for asset-backed security purchases.
The comments saw the U.S. dollar rally to a four-month high of 1.3501 against the euro, while the U.S. dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.2% to trade at 80.87.
A stronger U.S. dollar usually weighs on oil as it makes dollar-priced commodities more expensive for holders of other currencies.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.