Global Biz

Oil rebounds as dollar weakens to new 15-month low

(Xinhua)
Updated: 2009-11-26 05:43

NEW YORK: Crude prices rebounded on Wednesday as the US dollar sank to a new 15-month low against a basket of major currencies, driving commodities up by increasing their investment appeal.

Light, sweet crude for January delivery jumped 1.94 dollars, or 2.6 percent, to settle at 77.96 dollars a barrel on the New York Mercantile Exchange. Floor trading at the Nymex is suspended on Thursday and the exchange will close early November 27 because of the Thanksgiving Holiday.

Oil prices first got some support after government report showed US crude inventory increased less than expected. However, oil failed to gain much as investors had little reason to feel thrilled by the huge level of current supply.

Real gains came at noon as the dollar fell against the euro to, demonstrating how much the dollar has come to affect energy prices. A weak dollar tends to push oil prices higher since it can give investors with other currencies more buying power.

In London, Brent Crude for January delivery gained 1.98 dollar to settle at 78.44 dollars a barrel on the ICE Futures exchange.