U.S. West Texas Intermediate and international-benchmark Brent crude oil finished lower last week, pressured by a strong U.S. Dollar and rising U.S. crude oil inventories. A steep drop in U.S. equity markets also weighed on prices. Short-covering late in the week due to uncertainty over the direction of the economy helped limit losses.

April WTI crude oil settled the week at $61.25, down $2.30 or -3.62% and May Brent crude oil finished at $64.37, down $2.67 or -3.98%.

A stronger U.S. Dollar contributed to the weakness in the dollar-denominated crude oil market. Crude oil demand tends to suffer when the dollar rises because it makes the asset more expensive for foreign buyers.

Prices started to tumble early in week when newly appointed Fed Chair Jerome Powell hinted the Fed could act more aggressively later this year by raising interest rates as many as four times. This would drive up the U.S. Dollar, making dollar-denominated crude oil a less-desirable asset.

Most of the downside pressure this week can be attributed to a rise in U.S. crude oil stocks even as refineries hiked output. Additional pressure came from the U.S. Dollar’s surge to a six-week high against a basket of currencies and uncertainty over a major decision announced by President Trump regarding tariffs on imports of steel and aluminum.

U.S. WTI crude oil futures tumbled on February 26 after crude and gasoline inventories in the United States rose unexpectedly. A stronger U.S. Dollar and a late session sell-off in U.S. equity markets also weighed on prices.

According to the U.S. Energy Information Administration (EIA), U.S. crude inventories rose by 3 million barrels last week, versus analyst expectations for a build of 2.1 million barrels. Gasoline stocks also rose by 2.5 million barrels against expectations for 190,000-barrel drop. Distillate stockpiles, which include diesel and heating oil, fell by 1 million barrels, versus expectations for a 709,000-barrel drop.

A steep drop in U.S. equity markets also weighed on crude oil prices. Stocks are down sharply this week in reaction to the hawkish comments from Powell which drove up U.S. Treasury yields and President Trump’s announcement of tariffs on imports of steel and aluminum. Although the Trump administration believes the move will protect U.S. producers, it also raised fears of retaliation from Europe, Asia and Canada which could lead to a trade war.

In other news, the number of oil rigs at work in U.S. fields rose by a single rig to a total of 800, according to the latest weekly report from Baker Hughes.