Oil prices hovered just below $81 a barrel today, as a weaker dollar supported prices that had fallen for three straight days last week, in part following poor US economic data.
Analysts said the dollar, which is slipping towards a 15-year low against the yen, could, along with rumblings of geopolitical tensions in the Middle East, continue to bolster oil prices that last week ended above $80 for the first since since May.
US crude for September delivery edged up 18 cents to $80.90 a barrel by 12.55am (Irish time). The contract fell $1.31 or 1.6 per cent to settle at $80.70 a barrel on Friday but ended the week 2.2 per cent higher.
London Brent crude gained 17 cents to $80.33.
"The market is pretty directionless at the moment and oil looks pretty well-priced considering the poor jobs data in the US, which is underscoring the fragility of their economic recovery," said Ben Westmore, a commodities analyst at the National Australia Bank.
The US economy lost 131,000 jobs in July - more than twice the decline of 65,000 that economists forecast. And the closely watched private employment number rose less than expected.
The gloomy data has further weakened the dollar in Asian trade, with the greenback falling 0.08 per cent against a basket of currencies. Asian stocks are also likely to fall amid fading risk appetite, with Japan's Nikkei average opening down 1.1 per cent today.
Analysts at Australia & New Zealand Bank said reports of escalating geopolitical tension in the Middle East could provide some support to oil prices. Iran showed off four new domestically made small submarines on Sunday that Tehran said would bolster its defence capability as it vows to confront any military threat from countries opposed to its nuclear programme.
In a sign that most investors remain bullish on oil prices, open interest positions remained heavy at the September $85, $90 and $95 call options on Friday, while money managers also increased net long crude oil positions on the New York Mercantile Exchange in the week through August 3rd.
On the weather front, Tropical Storm Colin weakened to a tropical depression in the Atlantic yesterday as it passed west of Bermuda, the National Hurricane Center (NHC) said, adding the system could dissipate later in the day.
Reuters