Tuesday June 23, 09:05 PM
Oil prices rebound amid dollar fall, Iranian crisis
NEW YORK (AFP) - Oil prices rebounded Tuesday on the back of a weak dollar and the raging Iranian political crisis.
New York's main futures contract, light sweet crude for delivery in August, rose 1.74 dollars from its closing price Monday to end at 69.24 dollars a barrel as the contract made its debut Tuesday.
London's Brent North Sea crude for August climbed 1.82 dollars to close at 68.80 dollars.
Prices had been dropping after scaling past 73 dollars a barrel in recent days as concerns over the economic crisis eclipsed supply worries amid political tensions in Iran and attacks on oil installations in Nigeria.
"We see a bit of a reversal from the last couple of days," said Bart Melek of BMO Capital Markets, describing it as "a bit of a pause in the correction we had."
"Weakness in the US dollar helped the prices to move higher as well," he added.
A fall in the greenback makes dollar-priced oil cheaper for buyers holding stronger currencies, which tends to boost demand and lift prices.
The euro climbed against the dollar Tuesday, breaking the 1.40 dollar mark on supportive eurozone economic data as investors looked ahead to the two-day US Federal Reserve monetary policy meeting that began Tuesday.
Oil prices early Tuesday ducked underneath 67 dollars, in line with falling stock markets and worries over global economic recovery. Traders also sought to lock in profits from the recent rally.
"There is a sense that the selloff might have been overdone," said Phil Flynn of Alaron Trading.
The political crisis in Iran also weighed on the market.
Iran ruled out on Tuesday overturning the disputed presidential election as US President Barack Obama said there were significant questions about the poll's legitimacy and condemned the crackdown on post-election protests.
But supreme leader Ayatollah Khamenei agreed to a request by the top election watchdog, to extend by five days Wednesday's deadline to examine vote complaints, Iran's ISNA news agency said.
As international alarm mounted over the crisis, the most serious challenge to the Islamic regime in its 30-year history, Britain said it was expelling two Iranian diplomats after a similar move by Tehran.
At the same time, other European nations hauled in envoys to protest at the election and the repression of protests.
"Still oil is unmoved as there are scores of producers waiting to fill any void in oil production that may happen in the event of a cut off in supply," said Flynn.
Oil prices plunged from highs of more than 147 dollars in July 2008 to about 32 dollars in December as the economic slowdown crushed demand for energy but the market has since clawed back ground on hopes for a recovery.
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