Sponsored by: Investment Center

Something new in your business?  Click here to submit your business press release

Chamber Corner | Main Street News | Job Hunt | Classifieds | Calendar | Illinois Lottery 

Oil edges down below $121 on stronger dollar

Send a link to a friend

[August 22, 2008]  BEIJING (AP) -- Oil edged down below $121 a barrel Friday after jumping more than $5 overnight. Investors' fears that tensions with Russia would further disrupt crude supplies to the West were partly offset by a stronger dollar, which pushed down energy prices.

DonutsBy midday in Europe, light, sweet crude for October delivery was down 62 cents to $120.56 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $5.62 overnight to settle at $121.18 a barrel.

In London, October Brent crude fell 43 cents to $119.73 a barrel on the ICE Futures exchange.

"It's still speculative whether Russia will use oil as a weapon to punish the West," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. "But it has certainly focused the market on that geopolitical threat."

The United States and Poland signed a deal Wednesday to place a U.S. missile defense base just 115 miles (180 kilometers) from Russia's westernmost border -- a move quickly denounced by Moscow.


Russia's Foreign Ministry warned that Moscow's response to further development of the missile defense shield would go beyond diplomacy.

U.S. Secretary of State Condoleezza Rice has dismissed any suggestion that the missile defense interceptors to be based in Poland constitute a threat to Russia. Washington says the base is a way to defend the U.S. and Europe from the possible threat of long-distance missiles from Iran.

Russian forces also lingered deep in Georgia on Thursday, digging trenches and setting up mortars a day before Kremlin officials promised to complete a troop withdrawal from the former Soviet republic. A top Russian general said it could be 10 days before the bulk of the troops left.

Western leaders remained adamant that Russia remove its troops and do it quickly.


U.S. Senator Joe Lieberman said Thursday he wants to see Russia kicked out of the Group of Eight "for a while" and denied entry into the World Trade Organization as punishment for its actions in Georgia.

"The Russian-Georgia conflict has disrupted supplies and it looks like it will drag on and create a lot of uncertainty," Shum said.

London-based BP PLC last week shut down its Baku-Supsa oil pipeline -- which runs through the center of Georgia from Baku in Azerbaijan to Supsa on Georgia's Black Sea coast -- because of security concerns.

[to top of second column]


The line, which has the capacity to pump up to 150,000 barrels a day, had recently been pumping around 90,000 barrels a day, according to a BP spokeswoman.

The British oil company also said that testing was to begin Wednesday on the closed Baku-Tbilisi-Ceyhan oil pipeline -- which runs through Georgia as well -- ahead of a move to restart full operations as early as next week.

That line, owned by a consortium of energy companies led by BP, has been closed for more than two weeks after a fire on its Turkish stretch. Kurdish rebels have taken responsibility for that blaze.

Friday's strengthening of the U.S. dollar against other major currencies helped soften oil prices. Investors tend to put money into commodities like oil to hedge against inflation and dollar weakness. A stronger greenback usually is coupled with lower oil prices.


On Friday, the euro lost ground to the dollar, trading at $1.4822, down from $1.4877 late Thursday in New York, while the American currency rose to 109.26 Japanese yen, from 108.65 yen in the previous session.

In other Nymex trading, heating oil futures fell 1.81 cents to $3.2825 a gallon, while gasoline prices lost 3.32 cents to $3.0120 a gallon. Natural gas futures increased 4.3 cents to $8.295 per 1,000 cubic feet.

[Associated Press; By PABLO GORONDI]

Associated Press writer Alex Kennedy in Singapore contributed to this report.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.



< Recent articles

Back to top


News | Sports | Business | Rural Review | Teaching & Learning | Home and Family | Tourism | Obituaries

Community | Perspectives | Law & Courts | Leisure Time | Spiritual Life | Health & Fitness | Teen Scene
Calendar | Letters to the Editor