Oil halts 10-day rally as dollar strengthens

07:38, January 08, 2010      

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Oil prices declined after a ten-day rising streak on Thursday as a strong greenback limited the energy commodities' appeal as alternative investment.

Crude futures opened above 83 U.S. dollars a barrel on Thursday but soon pared gains and retreated after the dollar rose against the euro and other major currencies. Usually a strengthening dollar limited investors' appetite for risk assets, including energy commodities.

The latest oil inventory report released on Wednesday suggested ample supply in energy market, which offered little support for price rally. Crude and gasoline stockpiles increased, while distillate inventories, including heating oil and diesel, dropped far less than expected. All three categories have supplies at history high levels.

It is normal for oil to adjust a bit after a long rising stretch, analysts said. Oil prices had been rallying for ten sessions prior to Thursday, gaining about 14 percent in total.

Light, sweet crude for February delivery fell 52 cents to settle at 82.66 U.S. dollars a barrel on the New York Mercantile Exchange.

In London, Brent crude for February delivery fell 38 cents to settle at 81.51 dollars a barrel on the ICE Futures Exchange.

Source: Xinhua
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