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Crude oil futures pare losses on soft U.S. dollar

Published 05/16/2011, 09:56 AM
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Investing.com – Crude oil futures pared losses on Monday, easing off a daily low as the U.S. dollar turned lower after investors downplayed the impact of International Monetary Fund chief Dominique Strauss-Kahn’s arrest on sexual-assault charges on Sunday.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at USD99.19 a barrel during U.S. morning trade, dipping 0.25%. 

It earlier dropped by as much as 1.7% to a daily low of USD97.68 a barrel.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.37% to hit 75.64, pulling back from a six-week high of 76.19.

Global financial service provider Barclays said in a report published earlier in the day that, “peripheral issues are unlikely to have any fundamental impact on the [oil] market, given the underlying balances remain constructive.”

Meanwhile, the greenback was also pressured by news that the U.S Treasury expected to reach the debt ceiling by the end of the day, according to a senior Treasury official. 

On Sunday, President Barack Obama warned that a failure to raise the U.S. debt ceiling could disrupt the global financial system and threaten growth in the world’s largest crude consumer.

The U.S. Treasury Department projected earlier this month that the government was expected to reach the USD14.3 trillion debt-ceiling limit as soon as mid-May and run out of options for avoiding default by early July.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for July delivery shed 0.56% to trade at USD112.81 a barrel, up USD13.62 on its U.S. counterpart.

Ina report released late Sunday, Bank of America said that it expected Brent prices to average USD94.00 a barrel in the fourth quarter amid signs of demand destruction, especially in the U.S.

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