KEY POINTS:
Oil prices steadied just under US$79 yesterday, after slumping nearly 3 per cent on Monday, amid a commodities-wide slide tied to a rebound in the US dollar.
US crude futures slipped US10c to US$78.92 ($103.87), after hitting a three-week low of US$78.35 a barrel on Tuesday. London Brent crude fell US17c to US$76.41.
"The strengthening of the dollar has had a slight impact on the price of oil," said Gerard Burg, Minerals and Energy Economist at National Australia Bank.
But he also cited the passing peak of the Atlantic hurricane season, which runs until November but has yet to exact any significant damage on oil or gas infrastructure.
The dollar has risen following a report issued last week that US jobs growth figures in September were the best since May, heading off concerns the world's top energy consumer was about to tip into a recession.
Oil prices hit a record high of US$83.90 a barrel on September 20, after the US Federal Reserve cut interest rates in a bid to calm credit markets, sending the dollar lower.
The dollar stayed near a two-month high versus the yen yesterday.
Nabuo Tanaka, the new executive director of the International Energy Agency, said high prices would eventually hurt consuming nations' economies, but stopped short of calling on Opec to further increase output.
Attention will turn later this week to US data, expected to show a 600,000 barrel build in crude stocks, a 600,000 barrel draw in distillates and a 100,000 barrel fall in petrol inventories, according to a Reuters poll.
The weekly data will be released a day later than usual today, due to the Columbus Day holiday.
- Reuters
