Oil prices plunge after dollar firms

Oil prices plunge after dollar firms
AFP
Comment E-mail Print Share
First Published: Sat, Aug 23 2008. 12 25 PM IST
Updated: Sat, Aug 23 2008. 12 25 PM IST
New York: Oil prices have shed more than $6 a barrel after the dollar firmed and as the world’s second-largest pipeline appeared set to reopen.
New York’s main contract, light sweet crude for October, fell $6.59 to close at $114.59 dollars a barrel on 22 August.
The benchmark futures contract was 82 cents higher from a week ago, but remains about $33 below its record-high $147.27 on 11 July.
In London, Brent North Sea crude for October dropped $6.24 to settle at $113.92.
Oil prices that had surged more than $5 on Thursday headed south yesterday (22 August) when the dollar lost steam against the euro, said Phil Flynn at Alaron Trading.
“At the end of the day it is all about oil perceived value against a backdrop of uncertainty and a world and economic system gone wild,” he said.
“The best way to judge in terms of commodities is to watch the dollar. That is the gauge that will drive them all.”
The euro, which rose above $1.49 Thursday, was trading around $1.47 yesterday.
The greenback’s newfound vigor inspired profit taking in dollar-denominated oil ahead of the weekend, analysts said.
Another factor hitting crude prices was expectations that the Baku-Tbilisi-Ceyhan oil pipeline (BTC) would reopen next week.
BP, which operates the pipeline, said this week it expects to start loading oil to the ships at the port of Ceyhan on Turkey’s Mediterranean coast “early next week.”
The BTC line was shut on 5 August after a blast in a pump at a section in eastern Turkey sparked a fire. The blaze was put out six days later.
Comment E-mail Print Share
First Published: Sat, Aug 23 2008. 12 25 PM IST
More Topics: Oil | Light sweet crude | Brent | Dollar | Forex |