Oil Prices Rise on Middle weaker dollar

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Oil Prices Rise on Middle weaker dollar

Wednesday, 17 February 2010 09:09

New York - Oil prices surged on Tuesday local time in the middle of the weakening dollar and tensions over Iran's nuclear program is rich in oil.
The main futures contract, New York, light sweet crude for delivery in March, rose 2.88 dollars to 77.01 dollars per barrel.

Brent crude North Sea, London, for April delivery soared 3.17 dollars to 75.68 dollars per barrel.

In foreign exchange trading on Tuesday, the euro regained some losses recently against the dollar after European Union finance ministers put pressure on Greece to solve a huge debt.

A weaker greenback makes oil priced in dollars cheaper for buyers using stronger currencies, boosting demand.

"A renewed sense for the risk seems to have brought investors back into commodities markets," said Mike Fitzpatrick, vice president of e MF Global.

"The logic may be derived from the feeling that European policy makers have debt problems under control. Unfortunately, we do not see evidence of this," he said.

Fitzpatrick said the market remained concerned about how the EU will help Greece to dig out of debt crisis.

"European financial officials have raised the heat in Greece, but for investors, the number and the substance seems to fall on their promises to save the nation," he said.

"However, they refused to say how they will make good on a promise to save the nation if it can not fill its debts."

The price of oil "is supported by the weakening U.S. dollar as the euro strengthened," said Myrto Sokou, an oil market analyst Sucden Financial Research in London.

Oil prices recently hit by the fall of the euro and China's latest effort to cool the booming economy, traders said.

China is the country's second largest oil consumer world, after the United States.

"The market has clearly overreacted because of the second largest energy consumer world will still see a substantial increase in energy demand this year and growth will occur regardless of government efforts to reduce the loan," said commodities analyst Andrey Kryuchenkov of Russian investment bank, VTB Capital, Tuesday.

Concerns over Iran's nuclear push also influence the market.

Last week, Iran began enriching uranium up to 20 percent purity, which Washington and other capital adds evidence to say Iran is making nuclear weapons.

Tehran denies the accusations, insisting the aim is peaceful nuclear energy and research.

U.S. Secretary of State Hillary Clinton held talks in Saudi Arabia on Monday to seek support for new UN sanctions against Iran, which he warned was turned into a "military dictatorship" determined to develop nuclear weapons.

"This can only be owned by the results from the manufacture of Iran, and no doubt the rest of the world, concluded that the hostility growing closer," said Fitzpatrick.

OPEC oil producers' cartel last week mempertahakan moderate growth projection of world oil demand this year, but warned that the slow economic recovery that obscure the view.

World oil demand in 2010 is forecast to grow 0.8 million barrels per day (bpd) to average 85.1 million barrels per day, predictions Organization of Petroleum Exporting Countries, which together member countries pump about 40 percent from crude oil dunia.antaranews.com | tenderoffer.biz |