OIL PRICES fell $5 yesterday, reversing direction after Monday's dramatic rally, as dealers focused on slowing global energy demand and doubts over a US plan to rescue the financial sector.
A rebound in the US dollar added to weakness across commodities markets, continuing a strong negative correlation between the greenback and commodities that has been in place for at least several months.
US crude for November dropped $5.00 to $104.37 a barrel, after rising nearly $7 on Monday. November Brent crude traded down $5.05 at $100.99.
The losses followed a record surge of nearly 16 per cent in the now-expired US October crude contract on Monday. The US Commodity Futures Trading Commission said it was reviewing the price jump to ensure trading was valid.
Dealers said Monday's price surge was supported by a weak dollar and hopes the US bailout plan would ease the global financial crisis and support demand by top energy consumer. However, concerns political resistance could delay the package weighed on markets yesterday. - ( Reuters)
