Oil Close to $71, Shedding Early Losses on Weak Dollar

15 September 2009 (Last Updated September 15th, 2009 18:30)

The oil price hovered near $71 on Wednesday as the dollar's fall to one-year lows and the climb by Asian equities drew investors back to risky assets on brightening signs of a US economic recovery. Investors drew strength from data showing growth in US retail sales, New York State manu

The oil price hovered near $71 on Wednesday as the dollar's fall to one-year lows and the climb by Asian equities drew investors back to risky assets on brightening signs of a US economic recovery.

Investors drew strength from data showing growth in US retail sales, New York State manufacturing activity and US producer prices - factors that outweighed numbers showing a sharp jump in US distillate stocks, according to Reuters.

NYMEX crude for October delivery was down $0.03 at $70.95 a barrel by 07.10 GMT (3.10am EDT), after settling up $2.07 on Tuesday, while ICE Brent was down $0.17 at $69.69.

Though oil has more than doubled from this year's low of $32.70 hit on 20 January, it is trading 52% below the record high of more than $147 struck in July 2008, according to Reuters.

The market this year hit a high of $75 on 25 August.

The American Petroleum Institute said in its weekly inventory report after Tuesday's close that crude stocks rose by 631,000 barrels last week, against the forecast in a Reuters poll of analysts for a drawdown of 2.4 million barrels.

The industry group also said that distillate stocks, which include heating oil and diesel fuel, jumped by 5.2 million barrels, against a forecast rise of 1.3 million.

The Organization of the Petroleum Exporting Countries (Opec) said that signs of a rebound in the world economy appeared to be gathering but that the recovery would be gradual.