Oil prices slide further as dollar strengthens
Oil prices extended losses on Friday as the dollar jumped to a near year-high against the euro, traders said.
By Agencies |
LONDON: Oil prices extended losses on Friday as the dollar jumped to a near year-high against the euro, traders said.
A strong US currency makes dollar-priced oil more expensive for buyers holding weaker currencies, dampening demand for crude.
New York's main contract, light sweet crude for delivery in October, fell 1.80 dollars to 106.09 dollars a barrel
Brent North Sea crude for October dropped 1.97 dollars to 104.33 dollars.
Brent had ended down nearly two dollars on Thursday as the dollar began strengthening against the euro on eurozone economic woes while the market shrugged off a larger-than-expected decline in US energy stockpiles.
The dollar also found support in an Institute for Supply Management survey showing US service sector activity rebounded unexpectedly in August.
Many analysts expect oil prices to continue to fall because of declining demand in a slowing global economy.
Crude oil, which hit a record high 147.27 dollars on July 11 in New York, has lost nearly 40 dollars in less than two months.
In this context, the market dismissed news of an unexpected decline in US oil stockpiles last week.
The US Department of Energy (DoE) said crude stockpiles dropped 1.9 million barrels in the week ended August 29, ahead of the consensus forecast for a fall of 300,000 barrels.
Distillates, which include heating fuel, fell 400,000 barrels, less than the expected drop of 600,000.
Distillates are being watched closely by the market ahead of the northern hemisphere winter when demand for heating increases.
The oil market was looking ahead to Tuesday's meeting of the Organization of the Petroleum Exporting Countries (OPEC) amid speculation the cartel could cut output if prices hit 100 dollars or below.
A strong US currency makes dollar-priced oil more expensive for buyers holding weaker currencies, dampening demand for crude.
New York's main contract, light sweet crude for delivery in October, fell 1.80 dollars to 106.09 dollars a barrel
Brent North Sea crude for October dropped 1.97 dollars to 104.33 dollars.
Brent had ended down nearly two dollars on Thursday as the dollar began strengthening against the euro on eurozone economic woes while the market shrugged off a larger-than-expected decline in US energy stockpiles.
The dollar also found support in an Institute for Supply Management survey showing US service sector activity rebounded unexpectedly in August.
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Many analysts expect oil prices to continue to fall because of declining demand in a slowing global economy.
Crude oil, which hit a record high 147.27 dollars on July 11 in New York, has lost nearly 40 dollars in less than two months.
In this context, the market dismissed news of an unexpected decline in US oil stockpiles last week.
The US Department of Energy (DoE) said crude stockpiles dropped 1.9 million barrels in the week ended August 29, ahead of the consensus forecast for a fall of 300,000 barrels.
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Distillates, which include heating fuel, fell 400,000 barrels, less than the expected drop of 600,000.
Distillates are being watched closely by the market ahead of the northern hemisphere winter when demand for heating increases.
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The oil market was looking ahead to Tuesday's meeting of the Organization of the Petroleum Exporting Countries (OPEC) amid speculation the cartel could cut output if prices hit 100 dollars or below.
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