Oil mixed in Asian trade as dollar strengthens

Saturday, 8 January 2011 00:02 - - {{hitsCtrl.values.hits}}

SINGAPORE, (AFP) - Oil prices were mixed in Asian trade Friday as a stronger dollar made the commodity more expensive and doubts emerged over sustained demand in the United States, analysts said.

New York’s main contract, light sweet crude for February delivery, was up 46 cents at $88.84 per barrel.

Brent North Sea crude for February fell 42 cents to $94.10.

Analysts from the Commonwealth Bank of Australia said the weakness in oil prices was due to a “stronger US dollar, plus weaker jobless claims and retail sales data” which “raised doubts on US oil demand prospects”.

Matt Smith, an analyst with Summit Energy, said investors were flocking to the US currency as a safe haven because of worries over the euro.

The single currency dropped against the dollar in Asia on Friday, dragged down by lingering worries about eurozone sovereign debt problems and amid rising hopes for US recovery, dealers said.

A stronger greenback makes dollar-traded commodities like crude oil more expensive for investors, dampening demand and leading to lower prices.

Oil prices began the week by reaching two-year highs amid confidence in increased global demand, after the US economy showed more signs of recovery.