BIZ: Oil prices fall to near US$71 in Asia trade Friday as US$ gains
SINGAPORE: Oil prices fell to near US$71 a barrel Friday in Asia, giving up part of the previous day's big gains, as the U.S. dollar rebounded.
Benchmark crude for November delivery was down 49 cents at $71.20 by midday Singapore time in electronic trading on the New York Mercantile Exchange.
The contract added $2.12 to settle at $71.69 on Thursday.
Oil has bounced in a range between $65 and $75 for months amid signs a recovery of the U.S. economy could be slow and uneven.
A weakening dollar has helped support crude prices as investors pour money into commodities on concern that the surge in stimulus spending will eventually spark inflation.
"People are using crude and gold as an inflation hedge because the U.S. is just printing money," said Clarence Chu, a trader at market maker Hudson Capital Energy in Singapore.
"There's definitely been a negative correlation between the dollar and oil."
The euro fell to $1.4722 on Friday from $1.4791 the previous day, and the dollar rose to 89.18 yen from 88.37.
Oil prices will likely trade near $70 until there are more positive economic signs, such as job creation, Chu said.
"There hasn't been a strong signal that the economy is recovering," Chu said.
"There are still job losses every month."
The U.S. unemployment rate rose to 9.8 percent in September, the highest since 1983.
In other Nymex trading, heating oil rose 1.79 cents to $1.83 a gallon.
Gasoline for November delivery gained 1.43 cents to $1.77 a gallon. Natural gas for November delivery was steady at $4.96 per 1,000 cubic feet.
In London, Brent crude fell 56 cents to $69.21 on the ICE Futures exchange. - AP
Earlier report
Oil climbs above US$71 on weaker US$
NEW YORK: Energy prices climbed Thursday despite massive petroleum surpluses, as the dollar weakened and equities markets rose.
Benchmark crude for November delivery added $2.12 to settle at $71.69 a barrel on the New York Mercantile Exchange.
In London, Brent crude gained $2.57 to settle at $69.77 on the ICE Futures exchange.
Natural gas, gas futures and heating oil also jumped.
"It amazes me," Dan Flynn, an analyst with PFGBest, said.
"With all the supply we have, we are way overpriced."
The Energy Information Administration said this week that the country continues to sit on massive surpluses of petroleum.
Oil and gas stockpiles are well above average, and distillate fuels have grown to their highest level since January 1983.
Natural gas set a new record for unused supplies earlier this month.
On Thursday, the EIA said stockpiles continued to grow in underground caverns, climbing last week to 3.66 trillion cubic feet.
Traders recently have shrugged off supply data, however.
They've been swayed more by uncertainty in the U.S. dollar and signs that the economy was on the mend.
The dollar has lost value to other major currencies as the federal government pumped money into stimulus programs.
It took another hit this week on rumors that some countries - including China, Russia, Japan and France - were in talks to move away from using the dollar in oil trading.
The U.S. Dollar Index, which tracks the dollar compared with other major currencies, gave up 0.59 percent in afternoon trading.
Energy commodities, traded in dollars, tend to rise as the dollar falls and international investors gain more buying power.
They were also boosted by positive readings on the economy.
The International Council of Shopping Centers-Goldman Sachs tally showed that retailers last month enjoyed their first sales gains in more than a year.
In addition, the government reported that weekly jobless claims fell more than expected, and Alcoa Inc. reported an unexpected profit to kick off earnings season.
In other Nymex trading, heating oil rose 6.58 cents to settle at $1.8469 a gallon. Gasoline for November delivery gained 5.94 cents to settle at $1.7797 a gallon.
Natural gas for November delivery added 5.9 cents to settle at $4.963 per 1,000 cubic feet. - AP
