Weaker dollar limits oil price falls

Monday 27 June 2011 17.16
Oil prices - Fears over Greece default remain
Oil prices - Fears over Greece default remain

Oil prices slipped in this evening, responding to volatile moves by the US dollar and euro as Greece tried to pass an austerity programme.

Worries about the sluggish global economy with slower growth in China kept oil hemmed in. But oil drew support as the euro rallied against the dollar in a volatile session ahead of the Greek parliament's key vote on austerity measures this week.

A weaker dollar makes oil cheaper for holders of other currencies, leading to an increase in demand.

Brent crude dipped 10 cents to $105.02 a barrel, while US crude fell 56 cents to $90.60.

Crude oil prices had tumbled last week after the International Energy Agency agreed to draw on emergency reserves to make up for lost Libyan supplies and as global economic recovery fears prompted demand concerns. Brent crude nose-dived by $6.95, or 6% in value, last Thursday.

The IEA, which acts on behalf of industrialised nations' energy needs, sparked a steep sell-off when it announced its decision to release 60 million barrels of crude from strategic oil stocks over the next month, as part of efforts to give the global economy relief from sky-high energy prices.