| |
| |
![]() |
| |
|
| |
|
| |
|
NEW YORK: Oil prices fell on Thursday as the dollar strengthened against the euro on eurozone economic woes and the market shrugged off a larger-than-expected decline in US energy stockpiles.
New York's main contract, light sweet crude for delivery in October, slid 1.46 dollars to close at 107.89 dollars a barrel.
In London, Brent North Sea crude for October dropped 1.76 dollars to settle at 106.30 dollars.
New York crude oil prices rose early in the session but lost momentum as the euro sank against the dollar after the European Central Bank cut its eurozone growth forecasts for 2008 and 2009.
The European single currency fell briefly to its lowest level against the dollar since December 21, 2007 at 1.4326 dollars.
The dollar also found support in an Institute for Supply Management survey showing US service sector activity rebounded unexpectedly in August.
A stronger dollar makes dollar-priced commodities more expensive for buyers using weaker currencies.
Many analysts expect crude oil prices to continue to fall due to declining demand in the slowing global economy.
Crude oil, which had 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 an unexpected decline in US oil stockpiles last week.
The US Department of Energy (DoE) said crude stockpiles had dropped by 1.9 million barrels in the week ended August 29 instead of the consensus forecast of 300,000 barrels.
Distillates, which include heating fuel, fell by 400,000 barrels last week, less than the expected drop of 600,000.
Distillates are being watched closely by the market ahead of the northern hemisphere winter.
The latest DoE weekly report on energy stockpiles was published a day later than normal because of Monday's Labour Day holiday.
The oil market was looking ahead to Tuesday's meeting of the Organisation of the Petroleum Exporting Countries (OPEC) amid speculation the cartel could cut output if prices hit 100 dollars or below.
"The rapidity of the price slide should provoke an aggressive reaction from OPEC. Actually, there now appears to be a consensus building within the group for a production cut. The debate at next week's meeting in Vienna will be the size of a cutback," said John Kilduff at Alaron Trading.
OPEC member Nigeria said on Thursday that it was keeping its options open on output quotas in the wake of falling oil prices.
"I'm keeping an open mind," the junior minister for petroleum Odein Ajumogobia told AFP ahead of Tuesday's gathering in Vienna, where OPEC headquarters are located.
"We haven't seen the end of the volatility and I think we should wait and see how things settle down ... before we take a step to intervene."
The OPEC cartel of 13 countries produces 40 percent of the world's oil. - AFP/de
|
