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Oil futures erase losses to trade up 2% on weaker dollar

Published 12/01/2014, 10:37 AM
Updated 12/01/2014, 10:37 AM
© Reuters.  Oil turns higher after hitting 5-year low

Investing.com - West Texas Intermediate and Brent oil prices erased earlier losses to trade 2% higher on Monday, as a broadly weaker U.S. dollar lured investors back to the market.

On the New York Mercantile Exchange, crude oil for delivery in January fell by as much as 3.6% to touch a daily low of $63.75 a barrel, a level not seen since July 2009, before turning higher to trade at $67.31 during U.S. morning hours, up $1.18, or 1.78%.

On Friday, New-York traded oil futures sank $7.54, or 10.23%, to end at $66.15 a barrel. Nymex oil futures lost $10.36, or 13.54%, last week. Prices ended November down 18.07%, the worst monthly decline since October 2008.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for January rallied $1.00, or 1.43%, to trade at $71.16 a barrel. Prices tumbled 3.7% earlier to hit $67.57, the weakest level since October 2009.

London-traded Brent prices lost $2.43, or 3.35%, on Friday to settle at $70.15 a barrel. The January Brent contract sank $10.21, or 12.7%, last week, the biggest weekly loss since May 2011. Prices slumped 18.48% in November, the worst monthly performance in since October 2008.

Oil prices turned higher after the US dollar weakened against its major counterparts, as traders booked profits from the greenback\'s recent rally.

Futures plunged to the lowest level since 2009 earlier as investors piled on to their short positions in anticipation of lower prices in response to OPEC\'s decision to maintain production last week.

Concerns over weakening global demand combined with indications that OPEC producers will not cut output have weighed on prices in recent months.

London-traded Brent prices have fallen nearly 40% since June, when it climbed near $116, while WTI futures are down almost 39% from a recent peak of $107.50 in June.

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