Oil near $103 amid falling dollar, rising stocks

[June 01, 2011]  SINGAPORE (AP) -- Oil prices hovered near $103 a barrel Wednesday in Asia as traders mulled whether a weakening dollar could help push crude back to 2 1/2-year highs.

Benchmark oil for July delivery was down 15 cents to $102.54 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract added $2.11 to settle at $102.70 on Tuesday.

In London, Brent crude for July delivery was down 27 cents to $116.46 a barrel on the ICE Futures exchange.

Crude has risen from $96 last week as a falling dollar made commodities cheaper for investors with other currencies. The euro rose to $1.4415 from $1.4378 late Monday in New York. The dollar weakened to 81.36 yen from 81.50 yen.

"The dollar now seems to be on course to test the lows seen at the end of April," Cameron Hanover said in a report. "If that's the case, we could see stocks and oil prices also advance to test their late April highs."

Oil reached near $115 a barrel on May 2, the highest since September 2008.

A U.S. stock market rally also helped boost crude. Traders often look to equity markets as a barometer of overall investor sentiment. The Dow Jones industrial average gained 1 percent Tuesday and most Asian stock indexes were up slightly Wednesday.

In other Nymex trading in June contracts, heating oil was down 0.7 cent at $3.05 a gallon and gasoline shed 1 cent to $3.04 a gallon. Natural gas futures dropped 1.5 cents to $4.66 per 1,000 cubic feet.

[Associated Press; By ALEX KENNEDY]

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