Singapore: Oil retreated modestly in Asian trade on Thursday after overnight gains that were fuelled by the weakening dollar, analysts said.
New York's main contract, light sweet crude for September delivery eased 32 cents to USD 71.65 a barrel. Brent North Sea crude for September delivery dropped 37 cents to USD 75.14 barrel.
Both contracts closed stronger yesterday as investors
returned to commodities including oil, drawn by the weakening
US currency which makes crude futures an attractive investment
option.
Crude futures are priced in the US currency and become
cheaper when the dollar falls.
The euro surged from USD 1.40 last Friday to above USD
1.44, climbing to its highest level since December at USD
1.4445 on renewed hopes of a global economic recovery.
In late Wednesday US trade, the euro traded at USD
1.4411.
The dollar is seen as a safe-haven currency and tends
to do better during times of economic uncertainty, while the
riskier euro generally rises when investors feel upbeat about
the global economy.
"The US currency has come under pressure from the rise
in oil prices, although we expect the latter to fall back,"
analysts from London-based Capital Economics consultancy said.
Bureau Report
First Published: Thursday, August 06, 2009, 09:52