Oil rose in Asian trade yesterday, lifted by a weak U.S. dollar, which came under more pressure after a report that Gulf states considered dropping the greenback for oil transactions, analysts said. New York's main contract, light sweet crude for November delivery, was US$0.53 higher at US$71.41 a barrel. Brent North Sea crude for November delivery rose US$0.66 to US$69.22. "The soft tone of the U.S. dollar supported the oil price," analysts said. A weak greenback usually boosts crude prices because the dollar-denominated commodity becomes cheaper for foreign buyers holding stronger currencies. Gulf countries would instead use a basket of currencies, including the yen, the paper said, citing Gulf Arab and Chinese banking sources in Hong Kong. The report increased recent negative sentiment toward the U.S. dollar despite immediate denial of such a plan by Saudi Arabia, Russia, the UAE, Algeria, Qatar and Kuwait. Separately, traders are waiting for the release yesterday of a weekly oil stockpiles report by the U.S. Department of Energy to assess the demand situation in the U.S. economy, the world's biggest oil user. Analysts polled by Dow Jones Newswires said they expected crude stocks to rise by 1.7 million barrels in the week to Oct. 2 while gasoline reserves are seen to increase by 600,000 barrels.

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