(Bloomberg) -- Oil slid amid a surging dollar, while weak U.S. economic indicators pointed to concerns over an economic rebound.Futures in New York fell as much as 3.1% and the Bloomberg Dollar Spot Index rose 0.7%, reducing the appeal of commodities priced in the currency. U.S. consumer sentiment cooled more than forecast in January, data released Friday showed. Meanwhile, President-elect Joe Biden said he will ask Congress for $1.9 trillion to fund immediate relief for the U.S. economy that has been pummeled by the pandemic. Still, the large price tag and inclusion of initiatives opposed by many Republicans set up the aid package for a drawn out legislative battle.“The dollar strength is putting pressure on crude,” said Bob Yawger, head of the futures division at Mizuho Securities. Meanwhile, Republican opposition facing Biden’s virus aid proposal means “it may get chopped up and pushed out piecemeal, which is less than ideal. That’s been weighing on all risk assets, including oil.”Vaccine breakthroughs and a recent pledge by Saudi Arabia to deepen output cuts have driven oil 50% higher since the end of October. Commodities are showing all the signs of a structural bull market, according to Goldman Sachs Group Inc. JPMorgan Chase & Co. said a “nasty deficit” could emerge in the oil market later this year.“A bit of a pullback is just natural,” said Helge Andre Martinsen, senior oil market analyst at DNB Bank ASA. A strong dollar, a decline in equities and Brent’s recent overbought run are spurring the current drop, he said.This week has seen the annual commodity index rebalancing take place -- a move that was expected to see as much as $9 billion flow into the oil market. Since it began last Friday, there’s been a surge in so called trading-at-settlement volumes, an instrument often used by participants with index exposure. For Brent, average volumes over the last five days have reached a record.See also: Why the South China Sea Is Key to Blacklisted Oil Giant CnoocThe market’s structure has also softened. Brent’s prompt timespread briefly dipped into contango on Friday, a bearish move where nearby prices are cheaper than later ones. That compares with backwardation a week ago and indicates renewed concerns over supplies.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.