Monday, May 30, 2011

Oil Prices Ease


LONDON—Crude-oil futures traded lower as the dollar made gains against the euro.

Oil prices typically weaken when the dollar rises, as commodities priced in the greenback become more expensive to buy for investors holding other currencies.

Oil prices are likely to move with little conviction for the rest of the day as public holidays in the U.S. and U.K. keep many investors away from the market, although analysts also said a lack of liquidity means small volumes of trade could lead to larger-than-usual price swings.

"Today, volumes are expected to be thin, given the Bank holidays in the U.S. and the U.K., so it would not take a lot to move the market significantly one way or the other," said Glen Ward, head of retail derivatives at London Capital Group.

The front-month July Brent contract on London's ICE futures exchange was recently down 35 cents, or 0.3%, at $114.68 a barrel. The front-month July contract on the New York Mercantile Exchange was trading lower 43 or 0.4%, at $100.16 per barrel.

The Organization of Petroleum Exporting Countries is to meet next week amid mounting political pressure from consuming nations for the exporting group to increase supply as a way to help lower crude prices. Those countries also need to avoid a supply glut that could trigger a sharp slide in prices and hurt the group's domestic finances.

Ahead of the meeting, Saudi Prince Alwaleed bin Talal said in an interview Saturday that his country wants oil prices to come down to between $70 and $80 a barrel to avoid Western countries seeking replacement energy sources.

A raft of U.S. economic data released last week did little to assuage fears of an economic slowdown and a slump in oil demand in the coming months.

Write to Reza Amanat at

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