Oil still below $90 as dollar goes up
Published 07/12/2010 | 05:00
OIL was little changed near a 25-month high as the dollar strengthened against the euro and crude failed to break technical resistance at $90 (€67) a barrel.
Oil retreated after touching $89.76 a barrel, its highest intraday price since October 9, 2008. The dollar snapped three days of losses as Federal Reserve chairman Ben S Bernanke said another recession "doesn't seem likely." A stronger dollar curbs the appeal of commodities as an alternative investment.
"The dollar is showing some strength against the euro, which appears to be pulling us back at the moment," said Tom Bentz, of BNP Paribas Commodity Futures. "We've gotten within 24 cents of $90, and the $90 level remains in our sights."
Crude for January delivery rose three cents to $89.22 a barrel on the New York Mercantile Exchange. Prices have risen 12pc this year. Oil rose as much as 0.6pc earlier in New York on speculation the US may extend stimulus measures, bolstering demand in the world's largest consumer of crude.
Mr Bernanke said the Fed may expand bond purchases beyond the $600bn announced last month. Unemployment may take five years to fall to a normal level, he said.
The US currency rose 1pc to $1.3278 per euro. (Bloomberg)