Oil prices slide as dollar recovers

November 23, 2010 | 14:05

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Oil prices slid on Monday as the dollar gained ground against the euro on fresh concerns about European debt.

Following the agreement of a massive bailout for debt-laden Ireland oil prices were pushed down by the strengthening dollar.

New York's main contract, light sweet crude for December, shed 24 cents to $81.74.

Brent North Sea crude for delivery in January dropped 38 cents to $83.96 a barrel in late London trade after earlier jumping more than one dollar.

A stronger dollar makes oil more expensive for buyers using weaker currencies, hurting demand.

Oil prices tracked the foreign exchange market after the European Union and International Monetary Fund on Sunday agreed to bail out Ireland, with sources putting the cost at up to 90 billion euros ($123 billion).

On Monday the euro jumped as high as $1.3786 before falling to $1.3615 as optimism over Ireland switched to fears of contagion.

"We're still concerned about Portugal, we're still concerned about Spain, we're still concerned about Italy," said Phil Flynn, energy analyst at PFGBest.

"The bailout on the one hand was a positive thing but ... I think the markets are still a little bit nervous."

The euro has faced heavy selling pressure in recent weeks due to the debt woes of Ireland and other struggling eurozone nations such as Portugal and Spain.

AFP

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