Oil prices drop as U.S. dollar jumps

NEW YORK, Sept. 1 (Xinhua) -- Oil prices fell on Thursday amid strength in the U.S. dollar.

The West Texas Intermediate for October delivery lost 2.94 U.S. dollars, or 3.3 percent, to settle at 86.61 dollars a barrel on the New York Mercantile Exchange. Brent crude for November delivery decreased 3.28 dollars, or 3.4 percent, to close at 92.36 dollars a barrel on the London ICE Futures Exchange.

Fears that a slowing global economy would dampen fuel demand continued to weigh on the market.

A marked rise in the U.S. dollar also presented a headwind. The dollar index, which measures the greenback against six major peers, surged 0.92 percent to 109.6930 in late trading on Thursday. Historically, the price of oil is inversely related to the price of the U.S. dollar.

Traders also digested data on U.S. fuel stockpiles.

The U.S. Energy Information Administration reported Wednesday that the nation's crude oil inventories decreased by 3.3 million barrels during the week ending Aug. 26. Analysts surveyed by S&P Global Commodity Insights had expected a fall of 1.9 million barrels in U.S. crude supplies.