Oil prices boosted by weaker dollar

14th June 2010, Comments 0 comments

Oil prices rallied on Monday as a weaker dollar lifted demand for the key commodity, analysts said.

Brent North Sea crude for delivery in July jumped 1.65 dollars to 76 dollars a barrel in midday London trade.

New York's main futures contract, light sweet crude for July, gained 1.82 dollars to 75.60 dollars a barrel.

"It seems that risk appetite is back again on the table, as global equity markets are recovering strongly, while the weakening US dollar is still supportive for further gains in the energy market," said Sucden Financial analyst Myrto Sokou.

The euro climbed above 1.22 dollars on Monday as recent upbeat data sparked hope that the eurozone debt crisis will not derail the global economy, analysts said.

A weaker dollar boosts demand for dollar-priced commodities as they become cheaper for buyers holding rival currencies.

Oil markets were meanwhile recovering from a dip on Friday, when traders were spooked by a US government report showing retail sales in May plunged for the first time in eight months.

Retail sales unexpectedly dipped 1.2 percent to 362.5 billion dollars from April. Most economists had expected a 0.2 percent rise in May.

The monthly report is a primary indicator of consumer spending, a linchpin of the US recovery accounting for two-thirds of the country's economy.


© 2010 AFP

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