Oil set to finish the week lower

Oil fell for a third day as investors weighed the outlook for global interest rates and geopolitical tensions in the Middle East. Brent crude fell to $85 a barrel after losing almost 2% in the previous two days, while U.S. crude was below $81. The dollar was supported by a surprise interest rate cut by the Swiss National Bank, a headwind for commodities priced in dollars. The move came after the Federal Reserve signaled that three U.S. cuts could be made this year. Israel has said it will occupy Rafah no matter what the U.S. says, potentially raising tensions in the Middle East as it battles Hamas in the Gaza Strip. Meanwhile, Yemen’s Houthis have assured China and Russia that their ships will not be targeted in the Red Sea. Crude oil is still up in the first quarter, having broken out of a narrow range in recent weeks as U.S. inventories have been depleted, OPEC+ production cuts and Ukraine’s intensification of attacks on Russian territory, including refineries. But gains were limited by rising supply from outside the group and a mixed economic outlook in top importer China. “We expect oil markets to remain tight in the near term, while geopolitical risks are also likely to create some volatility,” said Han Zhong Liang, investment strategist at Standard Chartered. He said U.S. crude inventories data would be one to watch given recent stockpiles.