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Oil falls in Asia after overnight gains

Oil eased 20 cents to 78.70 dollars a barrel. -AFP

Tue, Nov 17, 2009
AFP

SINGAPORE - Oil fell slightly in Asian trade Tuesday after overnight gains spurred by a weak dollar and hopes of improved energy demand amid a global recovery, analysts said.

New York's main contract, light sweet crude for December delivery eased 20 cents to 78.70 dollars a barrel.

Brent North Sea crude for January delivery fell 32 cents to 78.44 dollars a barrel.

The two contracts had closed Monday higher as the US currency continued to weaken despite rare comments from Federal Reserve chief Ben Bernanke that the central bank strove for a strong dollar.

A lower greenback makes dollar-denominated commodities - like gold and crude oil - cheaper for buyers using stronger currencies. In turn, that tends to lift demand and prices.

Crude futures also received a boost from evidence of growth in Japan after data released Monday showed the world's second biggest economy expanded 1.2 percent in the July-September period.

It was the second straight quarter of expansion.

OPEC president Jose Maria Botelho de Vasconcelos repeated on Monday the cartel's view that 75-80 dollar oil was an adequate level to allow for a global economic recovery.

"Seventy-five to 80 dollars a barrel is a good price... for the recovery of the world economy," de Vasconcelos, who is also Angola's oil minister, said at a Gulf energy security conference in Abu Dhabi.

Organisation of Petroleum Exporting Countries (OPEC) members pump about 40 percent of the world's oil.

 
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