Oil hovers near $71 amid weakening US dollar
Oil prices hovered near $71 a barrel Wednesday in Asia after a weakening U.S. dollar sent crude soaring overnight.
By Agencies |
SINGAPORE: Oil prices hovered near $71 a barrel Wednesday in Asia after a weakening U.S. dollar sent crude soaring overnight.
Benchmark crude for October delivery was up 2 cents at $71.12 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange.
On Tuesday, the contract gained $3.08 to settle at $71.10 as the dollar fell to a low for the year against the euro and gold prices surpassed $1,000 an ounce for the first time since February.
Some investors buy oil, gold and other commodities as a hedge against a weakening dollar and inflation.
The euro was steady at $1.4488 in Asian trading while the dollar edged up to 92.32 yen.
``People are selling dollars for higher-yielding currencies, and that's driving oil higher,'' said Christoffer Moltke-Leth, head of sales trading for Saxo Capital Markets in Singapore.
``Keep an eye on the dollar and the $74 level,'' he said. ``If oil breaks that, it could shoot to $80 or $85 in the short-term.''
Investors will also be looking to the Organization of Petroleum Exporting Countries, which produces about 40 percent of the world's output, as it mulls production targets at a meeting later in the day.
Saudi Arabian Oil Minister Ali Naimi said Tuesday that crude markets were ``in good shape,'' boosting expectations OPEC will to stress compliance with output quotas instead of cutting production.
In other Nymex trading, gasoline for October delivery was steady at $1.83 a gallon, and heating oil held at $1.78 a gallon. Natural gas rose 4.2 cents to $2.85 per 1,000 cubic feet.
In London, Brent crude was down 12 cents to $69.30.
Benchmark crude for October delivery was up 2 cents at $71.12 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange.
On Tuesday, the contract gained $3.08 to settle at $71.10 as the dollar fell to a low for the year against the euro and gold prices surpassed $1,000 an ounce for the first time since February.
Some investors buy oil, gold and other commodities as a hedge against a weakening dollar and inflation.
The euro was steady at $1.4488 in Asian trading while the dollar edged up to 92.32 yen.
``People are selling dollars for higher-yielding currencies, and that's driving oil higher,'' said Christoffer Moltke-Leth, head of sales trading for Saxo Capital Markets in Singapore.
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``Keep an eye on the dollar and the $74 level,'' he said. ``If oil breaks that, it could shoot to $80 or $85 in the short-term.''
Investors will also be looking to the Organization of Petroleum Exporting Countries, which produces about 40 percent of the world's output, as it mulls production targets at a meeting later in the day.
Saudi Arabian Oil Minister Ali Naimi said Tuesday that crude markets were ``in good shape,'' boosting expectations OPEC will to stress compliance with output quotas instead of cutting production.
In other Nymex trading, gasoline for October delivery was steady at $1.83 a gallon, and heating oil held at $1.78 a gallon. Natural gas rose 4.2 cents to $2.85 per 1,000 cubic feet.
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In London, Brent crude was down 12 cents to $69.30.
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