Oil prices have fallen on expectations that oil giant Exxon will restart production following the resolution of a strike in Nigeria.
The eight day strike contributed to near-record high oil prices after the company was forced to almost completely shut down production in Nigeria.
US light, sweet crude was down $2.53 at $110.46 a barrel. In London, Brent crude was $2.22 lower at $109.14.
Last week, oil was trading at almost $120 a barrel in New York.
The weakness of the dollar has led many investors to put their money into commodities like oil, pushing up the price significantly in recent months.
The strengthening of the dollar this week has prompted investors to shift out of the commodity, contributing to the downward trend of prices.
But some traders fear it may only be temporary.
“It’s all about the dollar,” said James Cordier from Liberty Trading Group. “[And] I don’t think the dollar is going to stay strong.”
Data on Wednesday that showed US crude oil inventories had increased significantly also lowered prices.
The strike in Nigeria stopped virtually all of Exxon’s daily oil production there of 800,000 barrels per day.
“We have agreed to go back to work and we signed an agreement this afternoon,” said Olusola George Olumoroti, head of the union involved in the dispute.
He said Exxon had agreed to improve pensions and pipeline safety, and reduce the expatriate and casual labour it employs.
Discussion on the issue of pay is expected to resume once production has restarted.