Oil market dips on strong dollar

26th May 2015, Comments 0 comments

World oil prices fell on Tuesday as traders mostly took their cue from the rebounding US dollar, dealers said.

In early afternoon London deals, Brent North Sea crude for July reversed 66 cents to $64.86 per barrel, compared with last Friday's closing level.

US benchmark West Texas Intermediate (WTI) for delivery in July fell 29 cents to $59.43 a barrel.

"Crude oil prices remained under pressure... as the US dollar continues its strong upside momentum," said Myrto Sokou, senior energy analyst at the Sucden brokerage in London.

The stronger greenback makes dollar-denominated commodities, like crude oil, more expensive for buyers using weaker currencies.

That tends to dampen overall demand and pull prices downwards.

"The main factor weighing on (oil) prices is the significantly appreciating US dollar," agreed Commerzbank analysts in a note to clients.

The dollar powered to a fresh eight-year high against the yen on Tuesday, while the euro was weighed by growing concerns about Greece's bailout talks as a repayment deadline looms.

In addition, the US currency has also been underpinned by expectations the Federal Reserve will raise interest rates in the coming months -- a view supported by comments from Fed chief Janet Yellen who said Friday she expects a hike at some point this year.

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© 2015 AFP

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