Oil prices pressured by US dollar slumps

SINGAPORE: Crude oil prices diverged on Friday, but remain under pressure as the dollar lost some ground against other major currencies.


With several Asian markets closed for a holiday on Friday, trading resumed in the European session close to levels from Thursday’s close.

For now, investors have set aside concerns about the Greek debt crisis and the possibility of more crude oil coming from Iran, and turned their attention to the US dollar.

The euro was marginally higher against the dollar at $US1.089 by midmorning on Friday.

The British pound hit a fresh seven-year high against the euro after Bank of England Governor Mark Carney on Thursday suggested a rate hike may come sooner than markets expect.

A weaker dollar makes it cheaper for overseas buyers to purchase dollar-denominated oil.

“The weak euro/dollar worked against crude oil yesterday and will be an input to keep on the radar screen for the price evolution of crude oil,” said Olivier Jakob of Petromatrix.

On London’s ICE Futures exchange, Brent crude for delivery in September was up $US0.19 to $US57.02 a barrel. On the New York Mercantile Exchange, light, sweet crude futures for delivery in August traded down $US0.11 at $US50.80 a barrel.

US light sweet crude has recently declined further than Brent prices, largely due to concerns about the large volume of stocks in the US Brent was about $US6 more expensive than West Texas Intermediate on Friday, the highest level since late May.

Several analysts pointed to reports that the Buzzard oil field in the North Sea suffered a power outage on Thursday.

Buzzard, operated by Nexen CNOOC Ltd., produces Forties oil, the most important of the four oil types which determine the Brent price, according to analysts at Commerzbank.

The reports helped prop up Brent prices on Thursday, but Brent should decrease again once the problems at Buzzard have been resolved, they said.

A spokeswoman for Nexen in Canada wasn’t immediately available for comment.

Nymex reformulated gasoline blendstock for August the benchmark gasoline contract was up 0.3 per cent to $US1.9021 a gallon, while August diesel traded 0.2 per cent higher at $US1.6701.

ICE gasoil for August changed hands at $US516.50 a metric ton, down $US3.25.