Oil slipped today as the dollar strengthened, but was still trading near seven-week highs of around $81 as US demand edged up with a recovering economy.
Total oil demand in the world's top consuming nation grew 0.3 per cent in the past four weeks from a year earlier, US government data showed yesterday, raising expectations for an end to a 1-1.5-year period of sustained consumption decreases.
The dollar gained 0.13 per cent against a basket of currencies, sending crude down 22 cents to $80.65 a barrel. The front-month contract touched $81.23 yesterday, its highest intraday price since January 12th.
London ICE Brent for April fell 15 cents to $79.10.
Greece's budget-balancing pledges yesterday helped restore some appetite for risk, boosting the euro against the dollar. Later today, the spotlight focuses again on the euro zone, which will report revised gross domestic product for the fourth quarter.
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 2 million barrels per day from a year earlier, according to Barclays.
Interest rate decisions from the Bank of England and the European Central Bank are also expected today, followed by US durable goods and factory order statistics for January. And on Friday, attention will turn to U.S. non-farm payrolls.
US crude inventories last week rose a larger-than-expected 4.1 million barrels, the Energy Information Administration (EIA) said yesterday.
The dollar had fallen against the euro yesterday as concerns eased about deficits in European countries. A weaker dollar tends to support oil prices, making dollar-denominated commodities cheaper for other currency holders.
Reuters