Oil prices slip from 18-month highs
06 Apr 2010
Crude prices, which hit an 18-month high near $87 a barrel on Monday, helped by rising optimism about energy demand in the US following data that showed an acceleration of economic growth, pulled back in Asian trade on Tuesday afer the dollar gained strength.
Hopes for a sustainable economic recovery and job growth in the US were strengthened with statistics released on Monday showing the US services sector grew at its fastest pace in nearly four years in March and future home sales unexpectedly rose in February.
The reports sent front-month US crude to $86.90 a barrel on Monday, the highest intraday price since October 2008. Today US crude for May delivery slid 23 cents to $86.39 at 0235 GMT, while ICE Brent declined 35 cents to $85.53.
US crude inventories probably gained for a 10th consecutive week last week, a survey showed.
Market analysts said though fundamentals did not justify such a high price the underlying tone in the market remained positive, particularly as the US dollar remained stronger in trading today. They were pointing to the inverse correlation between the currency and crude.
The dollar gained 0.3 per cent against a basket of currencies on Tuesday. A stronger dollar renders imports of dollar-denominated commodities more expensive for buyers other than the US.
