Oil rises above $77 following weak dollar

03 December 2009

US currency mitigates impact of negative news

Crude oil prices in the US, the world’s biggest consumer, topped $77 a barrel on 3 December as a weak dollar mitigated the impact of negative news.

The January West Texas Intermediate contract traded at $77.10 a barrel, up $2.22 from the $74.88 recorded a week earlier.

Europe’s benchmark January Brent contract was trading at $78.75 a barrel at the same time, up $3.40 from the $75.35 a barrel a week before.

Meanwhile, the average price for crude oil produced by the international oil cartel Opec was $77.31 a barrel on 2 December, up $0.60 from a week before.

Oil prices fell because of concerns about the global economy, after Dubai’s government announced a restructuring of several affiliated companies’ debts on 25 December.

Confidence returned to markets on 30 November and WTI traded above $78 a barrel later in the week following strong manufacturing data from China.

This was tempered by a US government report on 2 December which showed that stocks of crude oil had increased by 2.1 million barrels in the week ending 27 November.

A fall in the value of the US dollar relative to other currencies on 3 December pushed crude prices above $78 a barrel. The dollar fell to $0.66 against the euro.

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