Crude falls in Asia due to stronger dollar

SINGAPORE: Oil prices tumbled in Asian trade Thursday, dragged down by a surging greenback and worries over a European debt rescue plan jeopardised by Greece's decision to hold a referendum, analysts said.

New York's main contract, light sweet crude for delivery in December, fell 96 cents to $91.55 per barrel in the afternoon.

Brent North Sea crude for December delivery dipped 68 cents to $108.66.

A strengthening greenback weighed on crude markets already bogged down by  Greece's decision to hold a national vote on a newly-agreed eurozone deal, said Sanjeev Gupta, head of Ernst & Young's Asia-Pacific oil and gas practice.

"Global benchmark crude prices weakened on the heels of a strengthening US dollar, a weakening euro, increasing doubts about the workability of the eurozone debt banking deal, and concerns that the deal would be undermined by Greek voters," he told AFP.

The euro fell against the greenback on Thursday, trading at $1.3693 from $1.3746 in late US trade Wednesday. A strengthening US dollar makes crude more expensive to traders using other currencies, dampening demand.

Greek Prime Minister George Papandreou's shock announcement Tuesday placed the fate of the debt deal in serious jeopardy, and earned the ire of European leaders as the global economy again faces the threat of recession.

Papandreou on Thursday said Greece's referendum could be held as early as December 4.

Crude markets were keenly awaiting a Group of 20 summit in the French resort of Cannes, where the leaders of the world's most powerful economies were attempting to strong-arm Greece into abiding by the terms of the rescue deal.

European leaders issued Greece with an ultimatum on the eve of the meeting that Athens would not get "one more cent" from the European Union and International Monetary Fund (IMF) unless it accepted the deal.

Copyright AFP (Agence France-Presse), 2011