Replies to post #13689 on Tsafi

[utcheevis]

I agree with the last sentence Tsafi, but I just hope it doesn't happen on my watch! lol

[atotalbum]

here comes the dollar..

Oil prices drop below $116 a barrel in Asian trading after sharp fall on stronger dollar

SINGAPORE (AP) -- Oil prices slipped further Friday after falling more than $2 a barrel in the previous session as the U.S. dollar strengthened, prompting investors to book profits.

Oil stalled in its march toward $120 a barrel Thursday after the greenback gained against the euro. Investors see commodities such as oil as a less effective hedge against inflation when the dollar strengthens. A stronger greenback also makes oil more expensive to investors overseas.


"Oil's bull run is taking a pause," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. "Oil pricing has simply gained too much, too fast, and so this profit-taking activity is much deserved."

Light, sweet crude for June delivery fell 11 cents to $115.95 a barrel in Asian electronic trading on the New York Mercantile Exchange by midday in Singapore.

The contract dropped $2.24 overnight to settle at $116.06 a barrel on the New York Mercantile Exchange. It sank as low as $114.25 a barrel during the session.

Analysts said the dollar gained ground Thursday on speculation the Federal Reserve is growing concerned about inflation and may not cut interest rates as much as once thought. Higher interest rates tend to stabilize or strengthen the dollar.

"The current thinking is that the U.S. dollar may be bottoming out, and so market participants therefore unwound some of their positions in oil and took some profits," Shum said.

Few analysts are willing to predict that oil's record run is over. Investors remain concerned about tight supplies of oil amid growing global demand, they say.

"Supply concerns will still underpin oil pricing, so the pullback won't be very substantial," Shum said.

Feeding those concerns, about 170,000 barrels a day of Nigerian production remained shut-in following a pipeline attack late last week. BP PLC is also considering shutting down its 700,000 barrel-a-day Forties pipeline system if a strike continues at a U.K. refinery.

In other Nymex trading, heating oil futures fell 0.5 cent to $3.2533 a gallon while gasoline prices dropped 0.53 cent to $3.0133 a gallon. Natural gas futures lost 5.9 cents to $10.731 per 1,000 cubic feet.

Brent crude futures rose 6 cents to $114.40 a barrel on the ICE Futures exchange in London.