Oil fell 1% at the close, with strong US data supporting the dollar, by Reuters

NEW YORK (Reuters) – Oil prices fell about 1 percent on Thursday after strong U.S. economic data spurred the dollar to a two-month high amid growing expectations that the Federal Reserve will raise interest rates again in June.

Brent crude futures fell $1.10, or 1.4 percent, to settle at $75.86 a barrel. US West Texas Intermediate crude fell 97 cents, or 1.3 percent, to $71.86, upon settlement.

The dollar rose to its highest level since March 17 against a basket of currencies on the back of data showing a lower-than-expected reading of new applications for unemployment benefits and amid optimism about a possible agreement on the debt ceiling.

A stronger dollar could reduce demand for oil by making it more expensive for holders of other currencies.

Higher interest rates increase borrowing costs, which can slow the economy and reduce demand for oil.

(Prepared by Ali Khafaji for the Arabic Bulletin – Edited by Mahmoud Abdel-Gawad)