Crude down by $1/bbl due to high US inventories, strong dollar

31 August 2010 08:29  [Source: ICIS news]

SINGAPORE (ICIS)--Crude futures fell by more than $1/bbl (€0.79/bbl) on Tuesday, undermined by high inventory levels in the US, declines in Asian equity markets and a stronger US dollar, traders said.

At 06:48 GMT, October Brent on London’s ICE futures was trading at a session low of $75.53/bbl, down $1.07/bbl. This followed a session low for the North Sea benchmark of $75.50/bbl, down $1.10/bbl.

October NYMEX light sweet crude futures, meanwhile, were trading at a session low of $73.42/bbl, down $1.28/bbl.

The crude price declined on Tuesday amid expectations that US inventory data due out later this week would reveal further builds in crude and distillate stocks. The development was viewed as another sign that the global economic slowdown has reduced oil demand.

Meanwhile, Asian equity markets posted significant losses on Tuesday with Japan’s Nikkei 225 Index down some 3.55% to a 16 month low.

The US dollar has also strengthened against the euro and other leading currencies as investors moved funds to what is viewed as a safe haven in times of market turbulence.

However, the rise in the value of the dollar served to make commodities such as crude less attractive to overseas investors.

($1 = €0.79)

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By: James Dennis
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