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SINGAPORE: World oil prices continued to go down in
Asian trade on Friday after the US dollar strengthened to its
highest level since late March, dealers said.
In the afternoon trade, New
York’s main oil futures contract, light sweet crude for June
delivery, slipped 58 cents to $111.94 per barrel.
The benchmark contract had
dropped 94 cents to close at $112.52 per barrel on Thursday at the
New York Mercantile Exchange.
Prices have eased since striking
a record high of $119.93 in New York last Monday during a Scottish
refinery strike and related pipeline closure.
Brent North Sea crude for June
delivery fell 50 cents to $110 a barrel, after settling at $110.50
on Thursday in London. The contract hit an all-time peak of $117.56
on April 25.
Victor Shum, senior principal at
energy consultancy Purvin and Gertz in Singapore, said oil has
pulled back primarily because of the dollar’s rise and supply-side
issues have been resolved.
The dollar will continue to steer
movement in oil prices, Shum added.
“In the near term, there is
still a bit of support at the $110 level and some market
participants might view this as a buying opportunity. It is a key
support level,” he said.
The US currency fell to a record
low of $1.6019 to the euro on April 22 but has since recovered,
changing hands at $1.5469 in Asian trade on Friday after shooting as
high as $1.5437 on Thursday.
It was the greenback’s
strongest showing since March 25. A stronger US unit makes
dollar-priced crude more expensive for foreign buyers and tends to
dampen demand.
Analysts said the dollar
strengthened following a better-than-expected reading on US
manufacturing activity and growing speculation that US interest
rates will stabilize.
Crude prices fell sharply on
Wednesday in response to a bigger-than-expected rise in crude oil
reserves in the US, the world’s biggest energy consumer, analysts
said.
The US government reported
American crude inventories rose 3.8 million barrels in the week
ending April 25, far stronger than market expectations for a gain of
1.5 million barrels.
Supply concerns lifted somewhat
on Thursday after workers at ExxonMobil’s Nigerian subsidiary
ended an eight-day strike.
The strike and attacks on
pipelines belonging to other companies in the southern delta region
badly hit production in Africa’s biggest oil producer and helped
push world crude prices toward $120 earlier this week.
Workers at the Scottish refinery
returned to work on Tuesday after their strike.
--AFP
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