Oil in London fell Because Dollar Rise

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Oil in London fell Because Dollar Rise

Saturday, 13 February 2010 09:32

London - World oil prices fell in London trading on Friday local time, as traders took their cues from the strengthening U.S. dollar, analysts said.
News U.S. crude oil stocks had risen more than expected last week also added to pressure oil prices decline.

The main futures contract, New York, light sweet crude for delivery in March, lost 1.90 dollars to 73.38 dollars per barrel at around 1700 GMT.

Oil Brent North Sea crude for March delivery fell 1.88 dollars to 72.24 dollars per barrel.

Oil prices slumped after the European single currency fell close to nine-month low against the dollar, as the market takes dim view of the euro zone growth data and no clear proposals of the European Union to assist the Greek debt.

In late morning London trading, the euro fell to 1.3532 dollars, its lowest level since q9 May, compared with 1.3695 in New York late Thursday.

A stronger dollar tends to reduce demand for oil due to crude oil priced in dollars more expensive for buyers using weaker currencies.

"While the key players of Europe and the IMF will not allow the failure of Greece, the euro is likely to remain under pressure from problems and similar concerns for other countries in the region," said analysts at JBC Enregy consultant in Vienna.

European Union leaders Thursday to stop offering "bailout" (bailout) to save the euro zone member Greece. Deep problems in the Greek public finances have highlighted the danger of debt from other countries affected by crises such as Italy and Spain.

Investors also look for "safe-haven" dollar after China ordered financial institutions to increase the amount of the minimum compulsory reserve deposits, because Beijing looking to rein in lending amid fears of rampant asset bubbles.

The development adds to concerns for the oil market because China is the country's second largest energy consumer in the world after the United States.

Also on Friday, traders digested a key report in U.S. oil inventories for the week until February 5. The report, usually published on Wednesday, was delayed due to a snowstorm in the northeastern United States.

Department of Energy said that U.S. crude oil stocks rose for the fourth week running, with 2.4 million barrels. That compared with analysts' expectations for a gain of 1.3 million barrels. | antaranews.com | tenderoffer.biz |