Oil falls in Asian trade
LONDON: Oil fell in Asian trade Wednesday as investors took profit after a recent rally sent prices to 80 dollars for the first time in a year, analysts said.
New York's main contract, light sweet crude for December delivery, fell 43 cents to 78.69 dollars a barrel.
The November contract, which expired Tuesday, briefly touched 80.05 dollars -- its highest since October 14, 2008 -- before easing to close at 79.09 dollars.
Brent North Sea crude for December delivery was off 29 cents to 76.95 dollars.
A weak dollar and an upbeat mood about the global economic recovery are driving the surge in crude prices, analysts said.
"The global recession has ended anly the US, China and Japan -- over the next few quarters,d we expect the recovery to look impressive in many economies -- notab" analysts from London-based Capital Economics consultancy said in a recent report.
"The upswing is driven by a mix of factors, notably the support from policy stimulus, the release of pent-up investment spending, the turn in the inventory cycle, lower headline inflation and, especially important for Asian exporters, the revival in world trade."
For the US economy, the world's biggest energy user, its gross domestic product is seen as growing 3.0-4.0 percent for a few quarters while full-year growth for 2010 is expected at 3.0 percent, Capital Economics said.
The weak dollar has also been a boost to crude. A weak dollar makes dollar-priced crude cheaper for holders of stronger foreign currencies, ramping up demand for oil.
In Asia trade, the euro bought 1.4923 dollars against 1.4937 dollars in New York. The dollar was trading at 90.74 yen in Tokyo by late morning, almost unchanged from levels seen late Tuesday in New York.
On Tuesday, the euro touched 1.4994 dollars, its highest level since August 2008.