04 June 2008 09:39 [Source: ICIS news]
LONDON (ICIS news)--Crude prices fell by more than $1/bbl on Wednesday to take Brent crude on London’s ICE Futures close to $123/bbl as the US Federal Reserve warned about inflationary pressures from a weak dollar.?xml:namespace>
By 07:55 GMT, July Brent crude had hit a low of $123.30/bbl, a loss of $1.28/bbl from Tuesday’s close of $124.58/bbl, before recovering to around $123.75/bbl.
At the same time, June NYMEX light sweet crude futures were trading around $123.70/bbl, having hit a low of $123.25/bbl, a loss of $1.06/bbl from the previous close.
This latest dip in prices was mainly due to a warning by the Federal Reserve’s Chairman Ben Bernanke, highlighting that the current weak dollar could result in higher inflation as imports became more expensive and dollar traded commodities continue to gain as the currency weakened.
These comments pushed the dollar up and may lead the Fed to increase or keep interest rates unchanged at the next Federal Open Market Committee (FOMC) scheduled for 24-25 June.
Meanwhile, the oil markets will be concentrating on the ?xml:namespace>
Analysts were expecting an increase in crude, distillate and gasoline stocks which could place more downward pressure on prices.
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