LONDON: Oil dipped on Monday, coming off 19-month highs as commodity prices were hit by a strengthening dollar and profit-taking, analysts said.
London’s Brent North Sea crude for June dipped 12 cents to $87.13 per barrel, having earlier struck $87.75 — a level last seen in October 2008.
New York’s main contract, light sweet crude for June, slid 16 cents to $84.96.
"We were up quite significantly on Friday night on positive (US) economic data but it seems dollar strength is starting to take effect now," said analyst Andrey Kryuchenckov at VTB Capital.
The European single currency fell against the dollar on Monday as traders were unconvinced by a multi-billion-dollar Greek rescue package from the EU and the International Monetary Fund.
The euro sank to $1.3320 from $1.3384 in New York late on Friday. A stronger dollar tends to hit demand for dollar-priced oil which becomes more expensive for foreign buyers using weaker currencies.
Oil was buoyed after positive economic data on Friday pointed to an ongoing economic recovery in the United States, the world’s top energy consuming nation.
Sales of newly constructed single-family houses in the United States jumped by nearly 27 percent in March compared with February, raising hopes the recovery was gaining traction.
The positive news in the housing market followed upbeat US corporate earnings reports.
Ahead this week, analysts will focus on more economic data and a US interest rate meeting.
"Market participants will be keeping an eye on consumer confidence data on Tuesday as well as the outcome of the Federal Reserve Bank meeting on Wednesday that could provide further signs of the US economic conditions and the levels of energy demand across the markets," said Sucden analyst Myrto Sokou.
Elsewhere, Kuwait Oil Minister Sheikh Ahmad Abdullah Al-Sabah said on Monday that current oil prices of $75-85 do not hamper global economic recovery.
"So far in 2010, we have witnessed a stable level of oil prices at between $75 and $85 a barrel," the minister told the opening session of the 18th Middle East Petroleum and Gas Conference.
"This price will not create hurdles for the world economic recovery," he added.
The Kuwaiti minister, whose country is OPEC’s fourth largest exporter, said the cartel will step in to raise output if prices breach $100.
Sheikh Ahmad said Kuwait will continue to invest in crude capacity increases to reach its target of four million barrels per day by 2020.
