Oil price falls as dollar strengthens

LONDON (AFP) - World oil prices lost ground on Thursday as dealers took their cue from the strengthening US currency, analysts said. New Yorks main contract, light sweet crude for April delivery fell 52 cents to 82.41 dollars a barrel. Londons Brent North Sea crude for May delivery was down 59 cents to 81.37 dollars. The euro sank against the dollar on Thursday on persistent worries over the Greek debt crisis after Athens warned it could appeal to the International Monetary Fund for aid if none is forthcoming from its eurozone partners. In earlier morning trade, the European single currency tumbled to $1.3648, before recovering to 1.3663 dollars, still down from 1.3735 dollars late in New York on Wednesday. The strengthening US dollar still remains a challenging issue which put further pressure on the energy market and prompts investors to some profit-taking, said analyst Myrto Sokou at the Sucden brokerage in London. The energy market is still without direction, while oil prices are likely to remain in the $80-84 narrow range for next weeks trading sessions. A stronger greenback makes dollar-denominated crude more expensive for buyers using weaker currencies. It therefore tends to stimulate oil demand and prices. Crude futures had risen on Wednesday on signs of stronger energy demand in key consuming nation the United States, and after the OPEC oil cartel decided to freeze its output levels in line with market expectations. The US Department of Energy said stockpiles of distillates, including diesel and heating fuel, fell more than expected, by 1.5 million barrels in the week ending March 12. Gasoline sank by 1.7m barrels, widely topping foreasts. Crude oil prices rose slightly on Wednesday near 83 dollars per barrel, supported by a weaker US dollar and a bullish sign from the EIA report that showed a drop in gasoline and distillate stocks, added Sokou. But a decision by the Organisation of the Petroleum Exporting Countries (OPEC) to hold quotas will support prices in the long-term, analysts said, adding Thursdays fall was likely to be temporary. We expect that OPEC will retain a cautious approach in the coming year, only increasing production targets when it is clear that growth in oil demand has wound back the inventory overhang, analysts from the Commonwealth Bank of Australia said. This approach will support oil prices, they said. OPEC left its output ceiling unchanged at 24.84 million barrels a day at a meeting in Vienna, citing uncertainty in the macroeconomic environment and world oil demand. OPEC said it would review the economic situation at its next ordinary meeting in Vienna on October 14.

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