Oil prices slide on higher dollar, China concerns
World oil prices sank on Tuesday, weighed down by a strengthening dollar and concerns that China might tighten monetary policy to rein in inflationary pressures, analysts said.
New York's main contract, light sweet crude for delivery in December, shed 2.20 dollars to 82.66 dollars per barrel.
Brent North Sea crude for December lost 1.74 dollars to 85.02 dollars.
"There are fears about the falling value of the euro against the dollar, leading to a rise in relative oil prices for European countries," said Ian Parrett, analyst at UK energy consultancy Inenco.
"Fears of rate tightening and slower growth in China will also have a knock-on effect on demand," he added.
The European single currency plunged close to a two-month low under 1.35 dollars on Tuesday as eurozone finance ministers held a crunch meeting in Brussels to address Ireland's debt crisis.
In afternoon deals, the euro sank as low as 1.3492 dollars -- the lowest level since September 28. A stronger dollar weighs on dollar-denominated oil which becomes more expensive for buyers using other currencies.
Eurozone finance ministers began talks at 1600 GMT in Brussels to grapple with a spreading debt crisis that has already brought Greece to its knees, and now threatens Ireland and also Portugal.
Speculation is building over a possible rescue for Ireland running up to 90 billion euros (123 billion dollars) after Greece was bailed out by the EU-IMF with 110 billion euros in May.
"Several factors are keeping a lid on oil prices at the moment," said Westhouse Securities analyst David Hart.
"Among these, rising inflation expectations in Asia are increasing concerns that growth in the region will be reined back which would, in turn, moderate increases in crude demand.
"A stronger dollar is also not helping, as debt woes in Europe continue to weigh on the euro," he added.
Data released last week showed that Chinese consumer prices rose at their fastest pace in more than two years in October, reviving worries that the authorities might hike interest rates again.
Chinese spending might be affected if monetary policy is tightened further and there are some who worry this will reduce China's appetite for commodities including oil.
© 2010 AFP