Oil prices rose to above $101 a barrel on Tuesday in Asia as a weakening U.S. dollar made crude cheaper for investors with other currencies.
Benchmark oil for July delivery was up 66 cents to $101.25 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange.
The benchmark contract last settled Friday up 36 cents at $100.59. Markets in the U.S. were closed on Monday for the Memorial Day holiday.
In London, Brent crude for July delivery was up 83 cents to $115.51 a barrel on the ICE Futures exchange.
Crude has risen from $96 last week amid a depreciating U.S. currency. The euro rose to $1.4388 on Tuesday from $1.4287 late Monday.
“Bottom line, as goes the dollar, so goes oil, in the opposite direction,” energy consultant The Schork Group said in a report.
Traders are also eyeing the U.S. economy, where recent manufacturing and consumer spending data has disappointed analysts.
However, sluggish economic indicators are a mixed signal for oil traders. A weaker economy would suggest less demand for crude, but it also tends to reduce confidence in the dollar, and a falling U.S. currency usually boosts oil prices.
“The strength and sustainability of the U.S. recovery is in question,” The Schork Group said. “But the Catch-22 is poor economic headlines are actually supporting higher oil prices vis-a-vis the U.S. dollar.”
Oil has dropped from a 30-month high near $115 a barrel on May 2.
In other Nymex trading in June contracts, heating oil gained 0.8 cent to $3.00 a gallon and gasoline was steady at $3.09 a gallon. Natural gas futures rose 5.7 cents to $4.58 per 1,000 cubic feet.
Keywords: oil prices