Oil prices climb before US data

22nd September 2010, Comments 0 comments

World oil prices rose Wednesday on the back of a weaker dollar as traders awaited data in top energy consumer the United States and absorbed a downbeat outlook from the Federal Reserve.

Brent North Sea crude for delivery in November gained 17 cents to 78.59 dollars a barrel in afternoon London trade.

New York's main contract, light sweet crude for November, added 56 cents to 75.53 dollars.

"Crude oil prices rebounded slightly ... as the weakening US dollar provided some support to the energy market," said Sucden analyst Myrto Sokou.

"Today, the main focus will switch to the US home prices data for September that could give (a lead on) ... US housing sector conditions, as well as the weekly oil inventories report."

Doubts over the strength of the US economy surfaced on Tuesday after the Fed warned that "the pace of recovery in output and employment has slowed."

The Fed also said it was prepared to take new stimulus measures if necessary to keep the US economy on track while leaving interest rates at record lows.

The news sent the dollar reeling against the euro and the yen. A weak dollar stimulates demand for dollar-priced commodities like oil, which become cheaper for buyers using stronger currencies.

Later on Wednesday, the US government's Department of Energy will publish its report on American crude oil inventories for the week ending September 17.

© 2010 AFP

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