Business | Oil & Gas
Crude prices rebound after slide as dollar weakens
Oil rose to about $132 a barrel on Friday, on a weaker dollar and on nagging concerns about stagnating output in Russia and other producers outside the Organisation of Petroleum Exporting Countries (Opec).
- Reuters
- Published: 23:53 May 23, 2008
London: Oil rose to about $132 a barrel on Friday, on a weaker dollar and on nagging concerns about stagnating output in Russia and other producers outside the Organisation of Petroleum Exporting Countries (Opec).
Oil prices fell more than three per cent on Thursday after hitting a record high above $135 a barrel.
US light crude for July delivery was up $1.51 at $132.32 a barrel by 1522 GMT. It surged to $135.09 on Thursday before slumping to settle at $130.81, the first time in five sessions that it settled lower.
London Brent crude was up $1.79 at $132.30.
Oil prices have climbed by around a third since the start of the year, driven upwards by worries about supply from non-Opec producers and the weakening dollar which prompted investors to use oil as a hedge against the falling currency.
The dollar looked set yesterday for its steepest weekly fall against a basket of major currencies in two months, as the high oil prices left the US economy vulnerable to slower growth and rising inflation.
Oil production from countries outside Opec is stagnating and forecast to remain below 50 million barrels per day this year, at 49.56 million bpd, lower than earlier forecast.
"The severity of non-Opec supply weakness stands out as a primary factor behind the strong run-up in prices," said Barclays Capital in a research note.
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