LONDON: Oil retreated on Monday, with both US and Brent crude down over a dollar, after Libyan rebel regained control of key oil towns and the dollar strengthened on hawkish comments from a US central banker.
US crude was down $1.07 to $104.33 a barrel at 1210 GMT after earlier dipping to $104.20. Brent crude for May was down $1 to $114.59 a barrel, after slipping to $114.55.
Michael Hewson, an analyst at CMC Markets, attributed the fall to the slightly stronger dollar following comments late last week from Charles Plosser, president of the Philadelphia Federal Reserve.
Plosser said the US central bank would have to reverse its easy money policy in the "not-too-distant future" to avoid sowing the seeds of inflation.
A stronger dollar means that commodities priced in dollars are more expensive for those using other currencies.
"Nothing has really changed from a Middle East perspective," Hewson said.
"That's not a situation that will go away any time soon."
Rebels regained control of all the main oil terminals in the eastern half of Libya over the weekend: Es Sider, Ras Lanuf, Brega, Zueitina and Tobruk.
They are now advancing on leader Muammar Qaddafi's hometown of Sirte, streaming west along the main coastal road.
A Libyan rebel official said on Sunday Gulf oil producer Qatar had agreed to market crude oil produced from east Libyan fields no longer in Muammar Gaddafi's control.
Qatar has recognised the rebel Libyan National Council as the sole legitimate representative of the Libyan people, the Qatari state news agency reported.
"These are positive developments, which are negative for oil prices potentially," said Olivier Jakob, an oil analyst at Petromatrix.
Comments
Comments are closed for this article.