Crude prices stay above 80 dollars on storm fears

Crude oil prices were lower in Asian trade Monday but stayed above 80 dollars a barrel as the peak Atlantic hurricane season remained a source of worry, dealers said.

At 11:30 am (0330 GMT), New York's main contract, light sweet crude for November delivery, fell 32 cents to 81.30 US dollars a barrel from 81.62 in late US trades Friday.

Brent North Sea crude for November delivery was off 40 cents at 78.90 dollars a barrel.

"It's still very strong," said Victor Shum, a Singapore-based analyst with energy consultancy Purvin and Gertz.

"Weather will be a key factor in the near term," he said in reference to the current Atlantic hurricane season, which typically peaks in September and ends in November.

New York oil prices struck a new peak of 84.10 dollars last week on fears a storm could threaten facilities in the Gulf of Mexico as well as tight supplies in the United States, the world's biggest energy user.

The weaker US currency is also providing underlying support for oil prices as importing countries find it less expensive to purchase crude where the trade is denominated in dollars.

"I think the door to 80 and beyond has opened. The weakening US dollar is also supportive of prices," said Shum. "A weak US dollar makes oil look cheap in the oil consuming nations."

The dollar fell to a new low of 1.4120 against the euro last week after the Federal Reserve cut key interest rates by a bigger-than-expected 50 basis points.

In Singapore trading Monday, the euro was at 1.4098 dollars compared with 1.4090 in late US trades Friday

Tight energy supplies in the United States were also a concern, dealers said.

The US Department of Energy said last week that American crude inventories plunged by 3.8 million barrels in the week ending September 14.

It was the 10th consecutive weekly drop and almost double the analyst consensus forecast for a fall of about two million barrels.

AFP