Oil slips below $81, retreating from 2009 high
Oil prices slipped below $81 a barrel retreating from a 2009 high, as a wobbly US dollar steadied in Asian trading.
By Agencies |
SINGAPORE: Benchmark crude for December delivery fell 90 cents to $80.48 a barrel at late afternoon Singapore time on Thursday in electronic trading on the New York Mercantile Exchange.
The contract rose $2.25 to settle at $81.37 on Wednesday as the dollar fell to its lowest since August 2008. Crude is traded using dollars, so it gets cheaper when the US currency falls.
The euro fell to $1.4959 on Thursday from 1.4999 the previous day and the dollar rose to 91.46 yen from 91.00.
Traders also eyed a smaller than expected rise in US crude supply data from the Energy Information Administration on Wednesday. Inventories rose 1.3 million barrels while analysts had expected a rise of 2.2 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
The two-week surge in the oil price has raised the specter that a jump in energy costs would fuel inflation and lead policymakers to ease stimulus spending and raise interest rates, undermining a nascent global economic recovery.
``It's definitely a potential threat,'' said David Cohen, director of Asian economic forecasting for consultancy Action Economics. ``Everybody gets a little nervous when the oil price starts bouncing higher.''
Energy Secretary Steven Chu said earlier this week that crude prices at $80 per barrel are worrisome.
Stock markets, which have soared since March, could see gains reversed if oil and other commodities continue to rally, Cohen said.
``The recovery is not so fragile that it can't tolerate another dollar or two in the oil price,'' Cohen said. ``But when people start getting worried about inflation, that could be a drag on markets.''
In other Nymex trading, heating oil fell 1.49 cents to $2.09 a gallon. Gasoline for November delivery dropped 1.65 cents to $2.04 a gallon. Natural gas for November delivery rose 2.6 cents to $5.13 per 1,000 cubic feet.
In London, Brent crude for December delivery fell 81 cents to $78.88 on the ICE Futures exchange.
The contract rose $2.25 to settle at $81.37 on Wednesday as the dollar fell to its lowest since August 2008. Crude is traded using dollars, so it gets cheaper when the US currency falls.
The euro fell to $1.4959 on Thursday from 1.4999 the previous day and the dollar rose to 91.46 yen from 91.00.
Traders also eyed a smaller than expected rise in US crude supply data from the Energy Information Administration on Wednesday. Inventories rose 1.3 million barrels while analysts had expected a rise of 2.2 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
The two-week surge in the oil price has raised the specter that a jump in energy costs would fuel inflation and lead policymakers to ease stimulus spending and raise interest rates, undermining a nascent global economic recovery.
``It's definitely a potential threat,'' said David Cohen, director of Asian economic forecasting for consultancy Action Economics. ``Everybody gets a little nervous when the oil price starts bouncing higher.''
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Energy Secretary Steven Chu said earlier this week that crude prices at $80 per barrel are worrisome.
Stock markets, which have soared since March, could see gains reversed if oil and other commodities continue to rally, Cohen said.
``The recovery is not so fragile that it can't tolerate another dollar or two in the oil price,'' Cohen said. ``But when people start getting worried about inflation, that could be a drag on markets.''
In other Nymex trading, heating oil fell 1.49 cents to $2.09 a gallon. Gasoline for November delivery dropped 1.65 cents to $2.04 a gallon. Natural gas for November delivery rose 2.6 cents to $5.13 per 1,000 cubic feet.
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In London, Brent crude for December delivery fell 81 cents to $78.88 on the ICE Futures exchange.
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