Oil back above $70 in Asian trade

I / Singapore September 22, 2009, 9:48 IST

Oil prices jumped back above $70 in Asian trade today as the US currency weakened, but trading was cautious ahead of the G20 summit on the global economy, analysts said.

Investors are also closely watching the results of a meeting of the Federal Reserve, the US central bank, on interest rates, they said.

New York's main contract, light sweet crude for October delivery, was up 41 cents to $70.12 a barrel in morning trade after declining $2.33 yesterday.

Brent North Sea crude for November delivery climbed 44 cents to $69.13.

"Oil has continued to take its cue from the value of the $," said Victor Shum, senior principal at Purvin and Gertz energy consultancy in Singapore.

"The $ has weakened against the euro and also the yen and that has provided some support to oil."

The $ was at 91.67 yen in Singapore morning trade, down from 91.99 yen in New York yesterday. Financial markets in Japan are closed for public holidays and will reopen Thursday.

The euro changed hands at $1.47, up from $1.46 yesterday.

Since oil is traded in the US currency, a weaker $ makes the commodity more attractive to holders of stronger units, leading to greater demand and pushing prices higher.