LONDON, May 16: World oil prices fell on Monday as a strengthening US dollar made the commodity more expensive for buyers, dealers said. New York’s main contract, light sweet crude for delivery in June, dipped 82 cents to $47.85 per barrel in early deals, after hitting $47.60, a level not reached since February 18.
In London, the price of Brent North Sea crude oil for delivery in June lost 76 cents to $47.90 per barrel, after plunging earlier to $47.65 — a low last seen on February 22. Towards the end of last week, “strong US retail sales figures added to a string of upbeat data on the US economy”, which lifted the dollar and in turn had a “bearish” effect on oil prices, analysts at Sucden brokerage firm said.
“A stronger dollar usually entices fund money away from commodity markets,” they added.
“The stronger dollar is a big factor. Plus, we still have high stocks in the US and short selling by funds,” Bache Financial trader Christopher Bellew said.
“The weakness we saw towards the end of last week was by funds taking on short positions, and it is possible we see more of that.”
Meanwhile, oil traders continued to digest recent the International Energy Agency (IEA) projections of slower energy demand from China and the United States. The IEA last week said demand in the first quarter of this year had slowed sharply in China and the United States, which were the main forces behind soaring demand in 2004.—AFP
