Oil edged lower on strong dollar
Financeroll – Oil edged lower to around $113.40 a barrel on Thursday as a stronger dollar offset fears of supply disruptions to Iranian crude should a European Union agreement to cut off oil imports from the No. 2 OPEC producer come into force.
Brent crude futures were off 37 cents to $113.33 at 1018 GMT, giving up earlier gains as the dollar strengthened. U.S. crude was down 72 cents at $102.50 a barrel, after reaching an intraday high of $103.73 earlier in the session.
On Wednesday, European Union governments reached a preliminary agreement to ban imports of Iranian crude to the EU, although they have yet to decide when the embargo will be put in place. U.S. Treasury Secretary Timothy Geithner will travel to China and Japan next week to discuss U.S. sanctions on Iran with top government officials.
Brent has gained nearly 6 percent over the last two sessions and closed at the highest since November 11 on Wednesday. U.S. crude gained 4.4 percent over the same period and settled at its highest since May 10 on Wednesday.
Despite the EU embargo threat, Iran says it is ready to ship its oil to China and other Asian countries as well as Africa. A French bond auction which sought to raise up to 8 billion euros in long-term debt drew solid demand following a recent rise in yields.
U.S. crude stocks fell 4.4 million barrels in the week to December 30, industry group American Petroleum Institute reported late on Wednesday, a sharply larger decline that the 200,000-barrel. The market is now awaiting the weekly data from the U.S. Energy Information Administration, which will come at 1600 GMT on Thursday. [RTR/FR]
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