Oil Prices Drop Again

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Price of crude oil fell more than six per cent, to around $47 a barrel yesterday, due to a rising value of the United States dollar and “growing caution about the pace of any economic recovery and its impact on oil demand.”

The dollar yesterday hit a one-month high against a basket of currencies, and analysts say a rising dollar can limit the appeal of commodities and oil to some investors.
The price of United States crude for May delivery was down $3.35, or 6.7 per cent, at $46.98 a barrel by 1350 Greenwich Mean Time yesterday, while the London Brent crude for June delivery fell $2.75 to $50.60.
 Head of  International Monetary Fund, Dominique Strauss-Kahn, said the agency would cut its global economic forecasts in the coming week, adding that he expected a recovery to start in the first half of next year.
Oil has fallen nearly $100 from its record high of over $147 last July, but has flattened out to trade around $50 for most of this month, in part due to OPEC supply cuts.According to a Reuters report, the International Energy Agency (IEA) said it did not expect OPEC to curb output again when it meets in May and did not see a recovery in oil demand until 2010.
Asked at an energy conference in Dubai when a recovery in oil demand was expected, IEA Deputy Executive Director, Richard Jones, said, “early next year.”
But Algerian Minister for Energy and Mines, Chakib Kheli, was quoted by a newspaper on Sunday, as saying that OPEC will be taking a big risk, if it does not make further adjustment to oil supply.“In my opinion we are taking a big risk if we do not re-adjust supply.
 It would be better, given the circumstances, not to take such risks,” Algeria’s Liberte newspaper quoted Khelil as saying.

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