Oil touches $87, continues rally

Oil touches $87, continues rally

London: Oil rose to a fresh 18-month high on Tuesday, rallying for a sixth consecutive session.

US crude for May delivery was up 12 cents (Rs5.34) to $86.74 a barrel by 1358 GMT, down from an intraday peak of $87.09, the highest since October 2008. ICE Brent rose 19 cents to $86.07.

“The trading today is very technical, and it’s going against the dollar," said independent oil analyst Olivier Jakob at Petromatrix in Switzerland.

The dollar gained nearly 0.6% against a basket of currencies and traders turned bearish against the euro following reports Greece would seek $5-10 billion from US investors to help cover its May borrowing requirements.

A stronger dollar usually makes purchases of dollar-denominated commodities more expensive for non-US buyers.

“We’re starting to come to a point where these oil prices could start to put the economic recovery at risk. Whatever we had last year was at an average $62 a barrel. It’s another thing to continue on the recovery path with $90 oil," Jakob said.

Also buoying the dollar was data on Monday showing US services sector grew at its swiftest in nearly four years in March.

Alejandro Barbajosa in Singapore contributed to this story.