London: Oil prices dropped on Friday and were
likely to stay under USD 80 because of high energy inventories
in the United States, the world's biggest energy-consuming
nation, analysts said.
New York's main contract, light sweet crude for December
delivery, fell 75 cents to USD 76.71 a barrel after slumping
by more than USD two yesterday.
Brent North Sea crude for January delivery lost 61 cents
to USD 77.03 in late London trading today.
Prices slid "with relatively swollen US stockpiles still
weighing," said VTB Capital commodities analyst Andrey
Kryuchenkov in London.
New York crude prices on Wednesday breached USD 80 a
barrel after government data showed crude reserves in the
United States fell 900,000 barrels in the week ending November
13.
However levels remain relatively high with demand
struggling to recover following the financial crisis.
Oil prices slumped yesterday as the dollar rose and owing
to renewed doubts about a sustainable global economic
recovery, traders said.
An array of largely unimpressive US economic data caused
a fall on Wall Street as investors sought safety in the
dollar, a traditional safe haven currency in times of
distress.
A stronger greenback makes dollar-denominated commodities
-- like crude oil and gold -- more expensive for buyers using
other currencies. That tends to reduce demand for such raw
materials, eventually weighing on prices.
PTI
First Published: Saturday, November 21, 2009, 00:17