Oil rises on weak dollar

23 November 2009

Crude oil prices moved higher during the Asian trading session this morning (November 23rd), with a weaker dollar making US commodities more attractive to foreign buyers.

During electronic activity on the New York Mercantile Exchange, the January-delivery crude oil contract climbed towards $78.50 (£47), up more than one per cent on its opening price. Wholesale heating oil prices also rose during the electronic trading period.

Speaking to Reuters, Michelle Kwek, an analyst at Informa Global Markets in Singapore, said that growing tensions between the US and Iran, the world's fourth largest oil producer, has also provoked buying of oil and derivative products.

"The rising Iran tensions, alongside US dollar weakness and gold's record high levels, have helped buoy oil prices," he said.

On Sunday, Iran began air defence war games to show off its military capabilities. Renewed concern about the country's nuclear ambitions has also increased tensions between Tehran and Washington.

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