23 Aug 2008

Oil falls as dollar rebounds

9:03 am on 23 August 2008

Oil prices fell more than $US3 on Friday in a commodities-wide pullback driven by a rebound in the US dollar.

US crude fell $US3.07 to $US118.11 a barrel at 1630 GMT on Friday, after surging nearly 5% in the previous session. London Brent crude fell $US2.99 to $US117.17 a barrel.

Other commodities also lost traction as the dollar fought back from a sharp correction the previous day against a basket of major currencies.

There is also evidence of rising supplies of crude oil from the Organization of Petroleum Exporting Countries. OPEC oil output is expected to rise in August by 450,000 barrels per day to 32.95 million bpd.

In addition, the US auto and travel group AAA said that Labor Day holiday travel is expected to fall this year due to higher gasoline prices and airfares.

Oil prices reached a record $US147.27 a barrel on 11 July.