US crude up $2/bbl as dollar falls against euro

05 June 2008 15:17  [Source: ICIS news]

 

LONDON (ICIS news)--NYMEX light sweet crude futures gained more than $2/bbl on Thursday to take the front month July contract above $124/bbl as the dollar lost ground against the euro after the European Central Bank (ECB) decided to leave interest rates unchanged.

  

By 13:50 GMT, July NYMEX crude had hit a high of $124.39/bbl, a gain of $2.09/bbl from the Wednesday close of $122.30/bbl, before easing back to around $123.85/bbl.

 

At the same time, July Brent crude on London’s ICE Futures was trading around $123.60/bbl, having hit a high of $124.11/bbl, a gain of $2.01/bbl from the previous close.

 

The euro gained ground against the US currency as the ECB decide to leave interest rates unchanged at 4 per cent and suggested that an increase later in the year could be on the cards.

 

This put an end to the dollar gaining against the European currency particularly after comments earlier in the week by US Federal Reserve Chairman Ben Bernanke highlighting the current weak dollar could result in higher inflation.

 

This pushed the dollar up as expectations increased on the likelihood for the Fed to increase or keep interest rates unchanged at the next Federal Open Market Committee (FOMC) scheduled for 24-25 June.

 

The markets gained earlier in the day as buyers returned to the market after massive price falls in recent days and amid news that the oil port of Marseille had been blockaded by strikers.

 

Moreover, further support to oil prices was provided from reports on Wednesday India and Malaysia followed other Asian consuming nations and raised their domestic prices due to the increased cost of fuel subsidies.

By: Giovanni Coiro
+44 20 8652 3214

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