Global Biz

Oil falls to below $99 as US dollar rallies

(Agencies)
Updated: 2011-05-16 15:26

SINGAPORE - Oil prices fell below $99 a barrel Monday in Asia as crude became more expensive for investors with other currencies amid a US dollar rally.

Benchmark crude for June delivery was down 84 cents to $98.81 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract settled at $99.65 per barrel Friday, up 68 cents.

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In London, Brent crude for June delivery was down 44 cents to $113.39 a barrel on the ICE Futures exchange.

Oil has retreated from a 30-month high near $115 at the beginning of the month as the dollar has strengthened.

"Crude oil continues to shadow the dollar to a large degree," Ritterbusch and Associates said in a report. "We still look for high negative correlation between the dollar and oil."

The euro fell to $1.4089 from $1.4110 late Friday. The euro reached $1.49 earlier this month.

Analysts are also closely watching for signs that soaring US fuel costs - gasoline tops $4 a gallon in some areas - are undermining crude consumption.

President Barack Obama said Saturday the US would ramp up oil production by extending existing leases in the Gulf of Mexico and off Alaska's coast and holding more frequent lease sales in a federal petroleum reserve in Alaska. However, Obama said the measures wouldn't immediately bring down gasoline prices.

In other Nymex trading in June contracts, heating oil fell 1.6 cents to $2.93 a gallon and gasoline dropped 0.7 cent to $3.01 a gallon. Natural gas futures were steady at $4.25 per 1,000 cubic feet.