Oil prices below 70 dollars in Asian trade

Tuesday, June 16, 2009

SINGAPORE: Oil prices fell below 70 dollars in Asian trade Tuesday, mirroring a dive on Wall Street amid a strengthening US dollar, but traders were closely watching developments in Iran, analysts said.

New York's main futures contract, light sweet crude for delivery in July, shed 69 cents to 69.93 dollars a barrel.

Brent North Sea crude for August delivery eased 66 cents to 69.58 dollars. The July contract expired on Monday.

A strengthening greenback as well as losses on Wall Street sparked the pullback in oil, analysts said.

"The firmer tone of the US dollar and declines on US equity markets were negatives for the oil price," the Commonwealth Bank of Australia said in its daily commodities report.

A stronger dollar makes crude more expensive for buyers holding weaker currencies and that in turn tends to dampen demand and push the market lower.

The US currency particularly rose against the euro Monday following a spike in eurozone job losses and fresh concerns the credit crunch could stifle tentative signs of recovery there.

Traders are also "likely monitoring political developments in Iran," which is a member of the Organization of Petroleum Exporting Countries (Opec), the report added, referring to violent post-election protests in Tehran.

Iran is traditionally a price hawk among Opec members and is usually the leading advocate of a cut in production.

"The unrest if it continues will attract the attention of oil traders," said Phil Flynn of Alaron Trading.


(AFP)