Singapore: Oil slid towards $80 (Dh293) Thursday as the dollar strengthened, pushing the fuel off seven-week highs struck a day earlier as US demand edged up in a recovering economy.
The dollar gained close to 0.3 per cent against a basket of currencies, sending crude down 50 cents to $80.37 a barrel by 0747 GMT. The front-month contract touched $81.23 on Wednesday, its highest intraday price since January 12. London ICE Brent for April fell 40 cents to $78.85.
"The oil market will trade in a range of $75 to $85 at least for the next two months, and it will possibly go above $85 by the middle of this year, depending on economic recovery," said Ken Hasegawa, a commodity derivatives manager at brokerage Newedge in Japan.
Total US oil demand grew 0.3 per cent in the past four weeks from a year earlier, US government data showed on Wednesday, raising expectations for an end to a 1-1/2-year period of sustained consumption decreases.
Greece's budget-balancing pledges on Wednesday helped restore some appetite for risk, boosting the euro against the dollar.
Commodity prices
China Investment Corp, the country's sovereign wealth fund, believes commodity prices are outpacing the global economic recovery, fuelled by loose monetary policies, a top official said.
"Personally, I think the prices are a bit too high, relative to the strength of real economic recovery," Jesse Wang, CIC executive vice president and chief risk officer, said on the sidelines of a conference in Beijing. Prices have ranged $69 to $84 a barrel over the past few months amid uncertainty about the pace of economic recovery. But a decline in global crude inventories and the surplus held in floating storage has set the stage for an increase towards the $80-$90 range, according to Barclays Capital.
The latest data from the Joint Oil Data Initiative (JODI) implied that Asian demand has been growing by more than two million barrels per day from a year earlier, according to Barclays.
