Oil prices rebound as dollar falls

October 23, 2010 | 12:42

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Oil prices bounced back on Friday as the US dollar renewed its slide and ongoing strikes in French refineries and ports pushed prices higher.

New York's main contract, light sweet crude for December, jumped $1.13 to $81.69 a barrel.

In London, Brent North Sea crude for delivery in December rose $1.13 to $82.96 a barrel.

The lower dollar makes oil prices cheaper outide the United States, boosting demand.

Oil prices dipped on Thursday as traders took profits from a rally the day before and the US dollar rose.

On Friday, the greenback renewed its decline against key currencies as investors expected the Federal Reserve to inject cash into the markets in order to boost the economy.

The French strike over pension benefits is also impacting US supply, said Phil Flynn of PFG Best.

Disruption in oil supplies remained widespread in France despite the government efforts to force refinery employees to resume work with an emergency decree as the strike shows no signs of winding down.

A report by Platts saying that China's oil demand in September rose by 5.1 per cent from last year further strengthened oil prices.

It has been a volatile week for crude futures, with them plunging on Tuesday in reaction to China's surprise interest rate hike.

AFP

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