(Bloomberg) — The dollar’s surge to a 12-year high is wreaking havoc in the oil market just when it looked like crude prices were finally stabilizing.

The CHART OF THE DAY shows U.S. oil futures have resumed their slide after rebounding close to $ 55 last month, as the U.S. Dollar Index increased to the highest since 2003. The lower panel shows that the negative correlation between the currency and oil is the most pronounced since 2013.

As the dollar rises, oil becomes more expensive in countries around the world. Crude is falling as inventories set weekly records, putting pressure on storage capacity. U.S. supply has climbed to the highest since at least 1982.

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“The strong dollar is adding a lot of pressure on oil prices,” said Tariq Zahir, a New York-based commodity fund manager at Tyche Capital Advisors.

WTI futures for April delivery fell 42 cents to $ 43.46 a barrel Tuesday on the New York Mercantile Exchange, the lowest settlement since March 2009. Prices have retreated 19 percent since closing at $ 53.53 on Feb. 17.

The dollar has been strengthening on speculation the Federal Reserve is moving closer to raising interest rates. The Dollar Index, which tracks the value of the dollar against the currencies of six trading partners, climbed to 100.33 on March 13, the highest since April 2003.

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To contact the reporter on this story: Moming Zhou in New York at [email protected]

To contact the editors responsible for this story: David Marino at [email protected] Stephen Cunningham

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