They slumped Because Dollar Rise

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They slumped Because Dollar Rise

Wednesday, 10 March 2010 10:05

New York - Oil prices slumped on Tuesday local time (Wednesday morning GMT) the dollar under pressure ahead of a strong and weekly data on petroleum inventories United States, the world's biggest energy consumer.

New York's main contract for light sweet crude April delivery, fell 38 cents to close at 81.49 dollars per barrel.

In London, oil, Brent North Sea crude for April delivery fell 56 cents to settle at 79.91 dollars per barrel.

Analysts said the sell action occurs in response to a stronger dollar, which makes oil priced in dollars more expensive for buyers using weaker currencies.

The euro fell as low as 1.3537 dollars on Tuesday as investors seek "safe haven" (a shelter) the dollar after the rating agency warns of deteriorating credit quality in Europe.

New York's benchmark contract fell as low as 80.16 dollars, 80 dollars a threshold test, before returning little equity in line with Wall Street.

Traders were waiting for weekly inventory report Department of Energy (DoE) U.S. on Wednesday for signs of the demand in the world's largest economy.

"The dollar is strong and people were looking forward to DOE statistics," said Andy Lipow, president of Lipow Oil Associates.

"For several weeks, we've seen oil prices rise at the same time market stock market ... But it still must be translated into increasing demand in the United States and some parts of Europe," said Lipow.

"The reality of the slow recovery of demand began to affect the price again," he added.

Mike Fitzpatrick of MF Global agreed, saying that the current oil demand "can hardly be considered to indicate that more easily can be absorbed."

At the close Monday, barrels of New York has climbed seven consecutive sessions and in daily trading has reached its highest level since January 11 at 82.41 dollars.

But futures contracts difficult to maintain the level of euphoria that has supported the U.S. employment data Friday a better than expected.

"The U.S. economy is on the road to recovery and we hope that U.S. energy demand rises gradually toward the summer driving season, the U.S.," said analyst Andrey Kryuchenkov VTB Capital.

In the U.S. driving season begins in May for summer vacation, a walk was the inspiration for many people.

Nic Brown from Natixis said the strike on the French oil giant Total recently, could contribute to reducing the European gasoline exports.

The strike could hinder the "normal arbitration transatlantic gasoline exports towards the U.S. driving season," he said.

"The strike, combined with the closure and other maintenance related to European refineries, gasoline could reduce European exports, leaving the U.S. more dependent on India and other refineries."|antaranews.com|tenderoffer.biz|