LONDON (AFP) – World oil prices rose on Friday as the dollar fell against the euro amid improving demand for crude, analysts said.
Brent North Sea crude for delivery in February climbed 29 cents to 91.89 dollars a barrel in London trade.
New York’s main contract, light sweet crude for January delivery, gained 16 cents to 87.86 dollars.
The dollar fell against the euro on Friday as positive German economic data and EU efforts to safeguard the single currency helped to offset a huge ratings downgrade for Ireland and more Spanish debt problems.
A weaker dollar makes crude priced in dollars cheaper for buyers holding rival currencies, pushing up demand.
Signs of improved demand were reinforced by the latest US data showing US crude reserves sank a massive 9.9 million barrels in the week to December 10 — the biggest weekly drop in eight years.
The United States is the world’s biggest oil consumer.
«Buoyed by a positive set of DoE statistics, oil prices consolidated further in their current range,» analysts from Barclays Capital said in a report. «The latest weekly data were extremely constructive all around.»
However, fears about Europe’s economy as the region struggles to contain sovereign debt problems could cast a shadow if the situation deteriorates.
«The market will be focussed on Europe as it fears that another crisis may send the euro lower and the dollar higher, taking away the desire to (buy) crude and other commodities,» said Phil Flynn of PFG Best.
«For traders though, all of this angst is a good thing as it is providing some wide trading ranges and which gives ample opportunities,» he added.