SINGAPORE – Oil prices edged higher in Asian trade Monday as the dollar weakened against the euro, spurring investor demand for crude futures, analysts said.
New York's main contract, light sweet crude for delivery in July, added 43 cents to $74.40 a barrel while Brent North Sea crude for July was up 50 cents at $74.52.
"The oil market continues to take its directions from the financial sector," said Victor Shum, an analyst with energy consultancy Purvin and Gertz.
"The US dollar has weakened versus the euro and we see a small increase in the oil pricing correspondingly," he told AFP.
In Asian trade, the euro bought $1.2314 in Tokyo afternoon trade, up from $1.2266 in New York late Friday. It gained to 112.71 yen from 111.80 yen.
A weaker US currency makes dollar-priced oil cheaper for holders of stronger currency units, which tends to stimulate demand and lift prices.
News that Fitch Ratings had downgraded the sovereign debt of Spain to AA+ from its top AAA rating sent prices retreating on Friday after recovering stock markets and positive data on the US energy market had helped boost sentiment.
With markets in the United States and Britain closed for a public holiday on Monday, trading is expected to be thin, said David Moore, a commodity strategist with the Commonwealth Bank of Australia in Sydney.
Moore added investors will watch for data from the Institute for Supply Management Tuesday on the pace of US manufacturing growth to gauge the impact of the eurozone debt woes on the world's largest economy and oil consumer.
Source: Inquirer
