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(Bloomberg) -- Oil fell by almost 1% to settle below $70 a barrel as expectations for fewer interest-rate cuts by the US Federal Reserve boosted the dollar.

Fed officials lowered borrowing costs as expected on Wednesday, but reined in the number of reductions they expect to make in 2025. The greenback rallied to a two-year high, making commodities priced in the currency less appealing.

Also weighing on the market: China’s biggest oil refiner said gasoline demand in the nation likely peaked, even as strong petrochemical growth continues.

Crude has been rangebound since the middle of October, and is set for the narrowest annual price band since 2020. Heading into 2025, traders are weighing a looming supply glut and lackluster Chinese demand with geopolitical risks, such as the chance President-elect Donald Trump moves to restrict Iranian supply.

“Oil oversupply is looming, but no one wants to be short” in case there’s a supply shock or escalation in the Middle East, said Joe DeLaura, a former trader and global energy strategist with Rabobank. “But there’s not enough of a demand slowdown or economic crash pricing-in to get Brent into the low $60s yet.”

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--With assistance from Maggie Eastland.