Oil prices slump as dollar rallies

10th March 2015, Comments 0 comments

Oil prices slumped Tuesday as the dollar pushed the euro to fresh lows, while the market also tracked geopolitical tensions in the crude-rich Middle East.

US benchmark West Texas Intermediate for delivery in April slid $1.31 to $48.69 a barrel.

Brent North Sea crude for April tumbled $1.73 to $56.80 a barrel.

The euro tumbled Tuesday towards a 12-year dollar low, hit by eurozone stimulus, growing US rate hike speculation and Greek debt concerns, dealers said.

The European single currency sank to $1.0697 -- the lowest level since mid-April 2003. The region's stock markets also slumped, with London's FTSE 100 closing down 2.52 percent as shares in energy groups crashed on sliding oil prices.

A stronger dollar meanwhile makes oil priced in the US unit more expensive for buyers using weaker currencies, denting demand and pushing prices lower.

Supporting crude prices was unrest in Libya between rival militias and the emergence there of the Islamic State group, analysts said.

Fighting in the north African state, a member of the OPEC oil-producing cartel, has seen output reduced from a high of almost 1.5 million barrels a day to 150,000, according to analysts.

Iraq, another OPEC member, is also battling jihadists who spearheaded a sweeping offensive in June that overran large areas north and west of Baghdad.

Singapore's United Overseas Bank said oil remained under pressure as a stronger US dollar was "offsetting geopolitical tensions and the threat of output cuts in Libya and Iraq".

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© 2015 AFP

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