Oil prices rose in Asian trade on Tuesday as traders capitalized on a weakening US dollar, analysts said. New York’s main futures contract, light sweet crude for delivery in January, rose 35 cents to $74.28 a barrel.
Brent North Sea crude for January delivery climbed 57 cents to $77. A weakening greenback was providing impetus for traders to buy crude, analysts said.
“The dollar is weaker this morning… people tend to look at the dollar for direction,” said Clarence Chu, an oil trader with Hudson Capital Energy in Singapore.
“For the past six months or so, the correlation of the dollar and crude is pretty strong,” he added.
The dollar had fallen to 88.96 Japanese yen at 0200 GMT from 89.57 yen on Monday. A slumping greenback will make dollar-priced crude more attractive for buyers using weaker currencies.
The US dollar had shot to a one-month high in intraday trade Monday but pared gains following indications from the US Federal Reserve that they would maintain virtually zero interest rates.
Federal Reserve Chairman Ben Bernanke suggested that the Fed would keep its key rate between zero and 0.25 percent, where it has been for a year, as the US recovery remained feeble.
“Though we have begun to see some improvement in economic activity, we still have some way to go before we can be assured that the recovery will be self-sustaining,” Bernanke said in a speech to the Economic Club of Washington. — AFP