Strong dollar sends oil below $105
Friday, 5 September 2008 18:57Oil prices fell below $105 today on concerns over slowing energy demand and a strong US currency, while the market awaited next week's OPEC meeting on crude output levels.
London Brent North Sea crude dropped 97 cents to $105.33 a barrel in electronic deals after slipping under $105 earlier in the day. US crude fell 96 cents to $106.93 a barrel.
The dollar struck a near 11-month high versus the euro on news of slumping industrial output in Germany, Europe's biggest economy, and as the market awaited key US jobs data, traders said. The dollar's swift rise was then checked when the disappointing US unemployment figures came.
The euro was down at $1.4260 in late afternoon London trade, after earlier hitting the lowest level since October 24, 2007.
A strong US currency makes dollar-priced oil more expensive for buyers holding weaker currencies, dampening demand for crude, which is already falling because of a global economic slowdown.
Many analysts expect oil prices to continue to fall because of declining demand in a slowing global economy. Crude oil, which hit records above $147 on July 11, has lost nearly $40 in less than two months.
