Oil prices fall as dollar gains against euro, pound




Crude oil declined, reversing earlier gains as the dollar advanced against the euro and the pound, making the commodity more expensive for European investors.Crude remains headed for a weekly gain as higher equities in Asia and Europe bolster optimism that fuel demand may increase. The MSCI World Index is poised for its biggest weekly rally in a year and the Stoxx Europe 600 Index advanced for a fourth day. Oil climbed after a U.S. government report recently showed stockpiles dropped 4.96 million barrels last week, the most since September.


“We’ve seen a sharp move downwards on the euro,” Maziar Amiri, an energy trader at E&T Energie Handelsgesellschaft mbH, said from Vienna. “That’s pushing oil down.”Crude for August delivery fell 26 cents, or 0.3 per cent, to $75.18 a barrel on the New York Mercantile Exchange as of 1:43 p.m. in London. The contract earlier rose as much as 51 cents to $75.95 a barrel. Oil is set for a 4.2 per cent increase this week, the most since the five days ended June 18.


Brent crude for August was down 10 cents at $74.61 a barrel at 1:43 p.m. on the ICE Futures Europe exchange in London after rising as much as 49 cents, or 0.7 per cent, to $75.20 a barrel. The euro was down 0.7 per cent against the dollar at $1.2612 while the pound declined 0.5 per cent to $1.5087.


Brent crude prices averaged $79.41 in the second quarter and may fall in the third quarter on concerns the economy may weaken, Christopher Bellew, senior broker at Bache Commodities Ltd., said by phone from London. Bache expects Brent crude to trade from $68 a barrel to $78 this quarter, Bellew said.“I’m never worried it will fall below $60,” he said.


U.S. crude supplies fell to 358.2 million barrels in the week ended July 2, the lowest in 10 weeks, according to the U.S. Energy Department report. Imports slipped and refiners increased operating rates to 89.8 per cent of capacity, the highest weekly average since January 2008.Oil may rise next week after the International Monetary Fund upgraded its global economic outlook and as U.S. supplies dropped to a two-month low, a Bloomberg News survey showed.


Twenty of 38 analysts and traders, or 53 per cent, forecast crude will increase through July 16. Ten respondents, or 26 per cent, predicted futures will be little changed and eight saw a decrease. Last week 53 per cent of survey respondents forecast a price decline.





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