SINGAPORE (AFP) – Oil prices halted their rise in Asia Monday, hurt by the strengthening US currency which makes the dollar-price commodity more expensive.
The greenback rose after Japan s central bank shocked markets Friday with a decision to adopt a below-zero interest rate policy in a bid to spur bank lending and drive up inflation.
Bank of Japan chief Haruhiko Kuroda cited recent financial market turmoil and a China slowdown for ushering in a -0.1 percent rate on new reserves, and said the bank may go even further into negative territory.
By 0240 GMT, US benchmark West Texas Intermediate for delivery in March was down 49 cents, or 1.46 percent, to $33.13.
Brent crude for April, a new contract, was trading 53 cents, or 1.47 percent, lower at $35.46 a barrel.
The March contract ended on Friday under a revised scheme in which Brent now expires at the end of each month instead of every 15th.
“Oil has stopped its bullish momentum and most of the reason comes from the relatively strong dollar on light of Japan s surprising negative interest rate decision,” said Phillip Futures analyst Daniel Ang.
As oil is traded in dollars, a rise in the greenback will make crude more expensive for holders of weaker units, dampening demand and hurting prices.
Oil prices closed higher last week to end a turbulent January in which prices plunged to 12-year lows in the face of a global oversupply.
Speculation that Russia and the Organization of the Petroleum Exporting Countries will meet to discuss oil output cuts to push up prices supported sentiment last week.
The news, however, drew skepticism that such a meeting or agreement would take place, limiting its impact.
Ang said crude supply glut is likely to continue limiting any oil price gains.
“I don t think oil prices will continue rising without changes in fundamentals,” he told AFP.