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Oil near $103 amid falling dollar, rising stocks

Oil near $103 amid falling dollar, rising stocks

June 1st, 2011 by ALEX KENNEDY, Associated Press in News

SINGAPORE (AP) - Oil prices inched higher to near $103 a barrel Wednesday in Asia as traders mulled whether a weakening dollar could help push crude back to 2 1/2-year highs.

Benchmark oil for July delivery was up 23 cents to $102.93 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract added $2.11 to settle at $102.70 on Tuesday.

In London, Brent crude for July delivery was up 6 cents to $116.79 a barrel on the ICE Futures exchange.

Crude has risen from $96 last week as a falling dollar made commodities cheaper for investors with other currencies. The euro rose to $1.4421 on Wednesday from $1.4397 late Tuesday while the dollar fell to 81.18 yen from 81.51.

"The dollar now seems to be on course to test the lows seen at the end of April," Cameron Hanover said in a report. "If that's the case, we could see stocks and oil prices also advance to test their late April highs."

Oil reached near $115 a barrel on May 2, the highest since September 2008.

A U.S. stock market rally also helped boost crude. Traders often look to equity markets as a barometer of overall investor sentiment. The Dow Jones industrial average gained 1 percent Tuesday and most Asian stock indexes were up slightly Wednesday.

In other Nymex trading in June contracts, heating oil was steady at $3.05 a gallon and gasoline rose slightly to $3.03 a gallon. Natural gas futures dropped slightly to $4.66 per 1,000 cubic feet.