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Oil price down as Iraq fear eases Oil price down as Iraq fear eases
(about 3 hours later)
Global oil prices have fallen slightly in Friday trading on the news that an attack on an Iraqi export pipeline was not as serious as earlier thought. Global oil prices have fallen in Friday trading on the news that an attack on an Iraqi export pipeline was not as serious as earlier thought.
The price of benchmark US light sweet crude fell $1.93 to $105.65 a barrel by early afternoon in Europe while London Brent crude lost $1.22 to $103.78 The price of benchmark US light sweet crude fell $2.40 to $105.18 a barrel while Brent crude lost $1.23 to $103.77 at end of London's trading day.
"The [Iraqi] problem is not as serious as we thought," said oil analyst David Johnson of Macquarie Research."The [Iraqi] problem is not as serious as we thought," said oil analyst David Johnson of Macquarie Research.
A slightly stronger dollar had also lessened demand, analysts said.A slightly stronger dollar had also lessened demand, analysts said.
A weaker dollar generally increases the price of commodities such as oil and gold, as investors see them as a haven for their funds.
Continuing strong global demand for oil is also another factor keeping oil prices high.
Banking worriesBanking worries
The attack on the pipeline in Basra came as Iraqi government forces continued their assault on militias in the city and surrounding areas. The attack on the pipeline in Basra came earlier in the week as Iraqi government forces continued their assault on militias in the city and surrounding areas.
Earlier this month US light crude hit a record high of $109.72 a barrel, driven by the continuing weak dollar. Last week US light crude hit a record high of $109.72 a barrel, driven by the continuing weak dollar.
The dollar fell again in Friday trading, hit by continuing speculation of more trouble in the US banking sector, and the likelihood of additional interest rate cuts from the US Federal Reserve. Meanwhile dollar was volatile in Friday trading, as continuing worries over the health of the US banking sector was tempered by positive news that the rate at which commercial banks lend to each other had come down slightly.
The latest banking speculation surrounds Lehman Brothers, which insisted reports that it may follow the near collapse of Bear Stearns were "totally unfounded". A weaker dollar generally increases the price of commodities such as oil and gold, as investors see them as a haven for their funds.
In exchanges, one euro was worth as much as $1.5839, up from $1.5770 on Thursday. By 1800GMT the dollar had edged higher against the euro and the pound, erasing earlier falls.
One euro was worth $1.5762, while sterling dropped below $2 at $1.9918.
But the dollar's gains were expected to be short-lived ahead of a week brimming with key US economic data, including March employment figures.
The dollar hit a record low against the euro of $1.5904 earlier this month.The dollar hit a record low against the euro of $1.5904 earlier this month.