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Oil rises above $72 on weak dlr [Geo TV] 09 Feb, 2010
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SINGAPORE: Oil recovered early losses to rise above $72 a barrel on Tuesday, buoyed by a weaker U.S. dollar and hopes that European Union leaders could soon cobble together a rescue package for ailing euro zone countries.
Sentiment turned after the euro rose against the dollar, clambering off last week''s 8-½-month low on speculation of a rescue for struggling Greece after European Central Bank chief Jean-Claude Trichet left a meeting of central bankers in Sydney early for a European Council meeting.
U.S. crude for March delivery rose 24 cents to $72.13 a barrel by 0715 GMT, after hitting a morning low of $71.32. The contract settled up 70 cents at $71.89 per barrel on Monday.
London Brent crude was up 35 cents to $70.46.
"The recovery in crude is very much dollar-driven. There was a bounce in the euro due to short-covering, which helped boost oil prices," said Michelle Kwek, an analyst at InformaGlobal Markets in Singapore.
Crude had slumped in early trade, reversing a near 1 percent gain on Monday, as fears over the euro zone''s sovereign debt woes had cast a pall over commodity and equity markets.
Investors are cautiously awaiting the outcome of a special economy summit of European Union leaders in Brussels on Feb.11, as the bloc grapples with a debt crisis in Greece and budget concerns in other member states.
Investors have looked to wider economic data over the past year for signs of a recovery in the global economy and a potential rebound in flagging energy demand.
Japan''s Nikkei average edged down to a two-month closing low on Tuesday after Wall Street ended Monday below the10,000-level for the first time since November.
Over the past year, oil prices have frequently weakened as the dollar firmed, at times signalling a flight to safer havens by investors.
Crude has lost nearly 10 percent this year, dragged down by data showing bulging fuel stockpiles in the United States despite cold weather, concerns about slower Asian demand if China further tightens its monetary policy, and more recently, jitters over Europe''s financial stability.
The market will also await the release of weekly U.S. oil inventory data from the American Petroleum Institute (API), due at 1500 GMT, for further clues on the recovery in demand from the world''s top energy consumer.
Rising geopolitical tension could also underpin oil prices. International pressure for new sanctions against Iran grew on Monday after Tehran announced plans to make higher-enriched uranium and add 10 nuclear sites in a year, reawakening Western fears it wants to develop atom bombs. |
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