Oil prices up in Asian trade

I / Singapore December 08, 2009, 9:53 IST

Oil prices rose in Asian trade today as traders capitalised on a weakening US dollar, analysts said.

New York's main futures contract, light sweet crude for delivery in January, rose 35 cents to $74.28 a barrel.

Brent North Sea crude for January delivery climbed 57 cents to $77.00.

A weakening greenback was providing impetus for traders to buy crude, analysts said.

"The dollar is weaker this morning... People tend to look at the dollar for direction," said Clarence Chu, an oil trader with Hudson Capital Energy in Singapore.

"For the past six months or so, the correlation of the dollar and crude is pretty strong," he added.

The dollar had fallen to 88.96 Japanese yen at 0200 GMT from 89.57 yen today.

A slumping greenback will make dollar-priced crude more attractive for buyers using weaker currencies.

The US dollar had shot to a one-month high in intraday trade today but pared gains following indications from the US Federal Reserve that they would maintain virtually zero interest rates.

Federal Reserve Chairman Ben Bernanke suggested that the Fed would keep its key rate between zero and 0.25 per cent, where it has been for a year, as the US recovery remained feeble.