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Oil falls more than $1 as dollar firms

Reuters [1]
Tuesday, Aug 12, 2008

Oil fell more than $1 a barrel on Tuesday as part of a broader commodities sell-off on the firmer U.S. dollar, which countered concerns over possible supply disruptions due to the Russia-Georgia clash.

Worries over slowing global demand also put prices under pressure, after world No. 2 consumer China posted a surprise drop in July crude imports.

U.S. crude fell 90 cents to $113.55 a barrel by 0632 GMT, hovering at its lowest since early May. The contract has fallen more than $30, or around 23 percent, from the record above $147 a barrel touched on July 11.

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London Brent crude slid $1.19 to $111.48.

“Oil prices have again sagged lower despite the potential threat that the Russia-Georgia conflict poses to oil supplies. The firm U.S. dollar is weighing on the oil price,” David Moore, an analyst at the Commonwealth Bank of Australia, said in a note.

The U.S. dollar rose to a six-month high against the euro as concerns over the global economy have kept other major currencies under pressure.

Investors had bought oil and other commodities such as gold in earlier months as a hedge against inflation and a weak U.S. dollar, helping push oil prices to a record above $147 in July.

Crude oil had risen sevenfold at its peak last month, after climbing for six years on growing demand from China and other developing economies.

Full article here [1]