US oil prices eased from a 26-month high near $90 a barrel this evening as the dollar strengthened and offset support from higher demand caused by cold weather in Europe and parts of the United States.
The euro fell sharply against the dollar on renewed fears the euro zone's debt problems could spread. A stronger dollar makes oil more expensive for holders of outer currencies.
Cold weather and expectations that economic recovery will accelerate and push crude demand higher in 2012 helped push oil to a two-year peak earlier in the day. US crude fell 24 cents to $88.95 a barrel, while Brent crude for fell 22 cents to $91.20.
The US North-east, top US heating oil consuming region, will average near to below normal temperatures over the next six to 10 days and below normal temperatures were expected in North-east and North-west Europe, according to forecasts.
US heating demand was expected to be 16.3% above normal for the week to December 11, according to the US National Weather Service. Heating oil demand was forecast at 16.1% above normal for the same period.
