The return of a rising dollar and persistent worries about a global supply glut combined Thursday to send the U.S. oil benchmark to a six-year low, while natural-gas futures were laid low by a larger-than-expected rise in domestic supplies. West Texas Intermediate crude oil for September delivery on Nymex gave up early gains to drop $1.07, or 2.5%, to end at $42.23 a barrel, the lowest finish since March 3, 2009. The global benchmark, Brent crude lost 44 cents, or 0.9%, to end at $49.22 a barrel on London’s ICE exchange.

The dollar gained ground versus major rivals after solid U.S. retail sales figures and other economic data reaffirmed expectations for a rate increase by the Federal Reserve as early as next month. A stronger dollar typically weighs on commodities denominated in the U.S. unit because it makes them more expensive to users of other currencies. “It’s the first time the dollar has been able to gather some strength since the Chinese currency situation slapped us in the face. While dollar weakness may have served as support for crude oil in the last two days, it’s coming back to haunt the market today,” said Robert Yawger, director of energy futures at Mizuho Securities, in a phone interview.

Both contracts ended a volatile session higher on Wednesday after the International Energy Agency, in its closely watched monthly report, said demand for oil is increasing at its fastest pace in five years. But gains were tempered by continued worries over supply, with U.S. inventory data showing a smaller-than-expected drop.

Earlier Thursday, global financial markets—including oil futures—welcomed news from China that the central bank expects the yuan to stabilize, calling it a strong currency that is supported by solid economic fundamentals. The People’s Bank of China allowed the yuan to weaken for a third day running, but not as aggressively as some market observers had expected. Oil tanked earlier this week following the decision to weaken the yuan. The move will make China’s imports of commodities, including oil, more expensive, raising concerns about demand from the world’s second-largest economy. However, Bjarne Schieldrop, chief commodities analyst a SEB, said in a note on Thursday that the devaluation could have a positive impact on oil demand. “It is very unlikely that China will consume less oil and commodities as a results of a weaker yuan,” he said. “Rather than being a sign of China weakness, the devaluation will be positive for the Chinese economy on the margin and thus positive for commodity demand in general and oil demand specifically.”