SINGAPORE: Soaring oil prices continued higher in Asia on Friday, trading above $115 dollars on the back of a weakening US dollar that has helped drive a series of record highs, analysts said.
New York s main oil futures contract, light sweet crude for delivery in May, was 18 cents higher at $115.04 a barrel.
The contract reached $114.86 at the close of floor trading on Thursday at the New York Mercantile Exchange, and struck a record peak of $115.54 in electronic trade.
Brent North Sea crude for June delivery rose 30 cents to $112.73, from a close of $112.43 Thursday in London. The contract earlier touched a high of $113.38.
Oil is holding steady around the 115 level and overall, the market in the near term will likely on average trade sideways with a possibility of higher highs, said Victor Shum of Purvin and Gertz energy consultancy in Singapore.
As long as there are expectations that the US dollar will fall, the relationship between the greenback and oil will remain the focus guiding pricing, said Shum.
The oil price rally has been defying fundamentals, and so the movement in the dollar continues to drive oil in the near term, he said.
John Kilduff, an analyst at MF Global, agreed the dollar remains a key factor.
A weaker-trending dollar continues to be a key impetus behind the rally in crude oil, and the greenback shows no definitive signs of bottoming yet, he said.
David Moore, a commodity strategist at Commonwealth Bank of Australia in Sydney, said he was surprised at the levels oil prices have risen to and expects prices to be on the downside rather than the upside next week.
The dollar has fallen steeply against other world currencies in recent months, as US economic growth has slowed and fears have mounted that the world s largest economy could be in a recession.
The single European currency traded Friday at $1.5902 after shooting on Thursday to a record $1.5984 following a weak set of US data and hawkish comments on inflation by a European Central Bank official.
Dealers say oil and other commodities have benefited from an inflow of money from investors seeking higher returns than they can get in battered financial markets.
The sliding US currency makes dollar-priced goods, such as crude oil, relatively cheaper for buyers using other currencies, stimulating demand.
US crude inventories slumped 2.3 million barrels in the week ending April 11, far steeper than the consensus forecast.
Crude reserves in the United States now stand at 313.7 million barrels, in the lower half of the average range for this time of year, according to the US Department of Energy. -AFP
