Crude languishes after ECB rate cut sends dollar on a run

Source: Denver International Airport

Brent turned slightly higher and U.S. crude oil settled lower on Thursday in choppy trading, as the euro and dollar reacted to the European Central Bank's (ECB) interest rate cut.

The dollar initially strengthened against the euro after the ECB cut interest rates to record lows and announced negative interest rates on overnight deposits. Brent bounced off a three-week low and U.S. crude from a two-week low hit after the ECB announcement. Crude, priced in dollars, comes under pressure when the greenback rises as it becomes less affordable to holders of other currencies.

U.S. crude finished down 16 cents at $102.48. It recovered after dropping to $101.60, its lowest since May 16. Brent crude added 50 cents to trade near $109 a barrel, after dropping to $107.77, its lowest since May 9.

Last month, political tensions pushed Brent above $111 but prices have shed about 3 percent since then.

Ukraine's President-elect Petro Poroshenko said he may discuss a plan to end violence in eastern Ukraine with Russian leader Vladimir Putin. This helped allay concerns that a conflict in Ukraine, a main gas supply route to Europe from Russia, could disrupt oil supplies as well.

The U.S. Labor Department will release its monthly jobs report, which is closely watched by financial markets around the globe, on Friday at 8:30 a.m. Eastern.

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