Oil prices extended losses in Asian trade yesterday as the U.S. dollar strengthened amid concerns about a eurozone debt crisis after Greece's debt rating was downgraded, analysts said.
New York's main contract, light sweet crude for June, dipped US$0.14 to US$82.30 on Tuesday.
Brent North Sea crude for June was down US$0.12 to US$85.66 per barrel. "The thing that's weighing on oil prices is mainly the currency movements, as the U.S. dollar has been higher," Ben Westmore, a minerals and energy economist with the National Australia Bank, told reporters. The euro hovered near one-year lows against the dollar in Asian trade Wednesday as investors fled from the single currency with the risk of a Greek default looming.
Overnight in New York, the euro fell below US$1.32 for the first time since April 28 last year, after Greece's debt rating was downgraded to junk status.
A stronger U.S. currency makes dollar-denominated crude oil more expensive to holders of weaker units, dampening demand and leading to lower prices.
Tumbling Asian stocks also weighed down on the oil market.
Oil investors are also looking to the results of a U.S. Federal Reserve board meeting on whether or not to raise its main interest rate, as well as the weekly energy inventories report by the U.S. Department of Energy (DoE).
