Oil continues higher near $107 in Asia
In Monday morning trade, New York's main oil contract, light sweet crude for delivery in May, rose 52 cents to $106.75 per barrel.business Updated: Apr 07, 2008 12:41 IST
World oil prices continued higher toward $107 in Asian trade on Monday, boosted by a weakening US dollar, tight energy supplies and negative news on the US economy, dealers said.
In Monday morning trade, New York's main oil contract, light sweet crude for delivery in May, rose 52 cents to $106.75 per barrel.
The benchmark contract jumped $2.40 to close at $106.23 a barrel during floor trading on Friday at the New York Mercantile Exchange.
Brent North Sea crude for May climbed 25 cents to $105.15 a barrel, after settling at $104.90 on Friday in London. The contract had rallied $2.38 at the close.
The greenback sank further against the euro on Friday after news that US employers cut a surprisingly large 80,000 jobs in March, the biggest decline in employment in five years, according to a government report.
The weak US currency tends to encourage demand for dollar-priced crude because it becomes cheaper for foreign buyers.
On Monday morning, the euro traded at $1.5699, down from $1.5736 in New York late on Friday.
Friday's jobs report prompted many commodity fund investors to bet on fresh falls for the dollar, traders said.
Alaron Trading analyst Phil Flynn said "bad economic news is good for commodities" in the near term.
Despite the speculative push, the trend should be lower for oil futures since slower economic growth will mean softer demand, Mike Fitzpatrick at MF Global said.
Many traders are concerned that slowing US growth could prompt a slowdown in energy demand because the United States is the world's biggest consumer of energy.