Press Trust of India / Singapore Oct 09, 2009, 10:12 IST
Oil prices fell to near $71 a barrel today in Asia, giving up part of the previous day's big gains, as the US dollar rebounded.
Benchmark crude for November delivery was down 49 cents at $71.20 by midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract added $2.12 to settle at $71.69 yesterday.
Oil has bounced in a range between $65 and $75 for months amid signs a recovery of the US economy could be slow and uneven.
A weakening dollar has helped support crude prices as investors pour money into commodities on concern that the surge in stimulus spending will eventually spark inflation.
"People are using crude and gold as an inflation hedge because the US is just printing money," said Clarence Chu, a trader at market maker Hudson Capital Energy in Singapore. "There's definitely been a negative correlation between the dollar and oil."
The euro fell to $1.4722 today from $1.4791 the previous day, and the dollar rose to 89.18 yen from 88.37.
Oil prices will likely trade near $70 until there are more positive economic signs, such as job creation, Chu said.
"There hasn't been a strong signal that the economy is recovering," Chu said. "There are still job losses every month."
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