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Oil tumbled in the Asian trade today due to a stronger dollar as global financial markets remained on edge on worries over the struggling US economy and the European debt crisis.
Analysts said prices are expected to be volatile, mirroring developments in the financial markets and the global economy.
New York’s main contract, West Texas Intermediate light sweet crude for delivery in September, fell 47 cents to $85.25 per barrel. Brent North Sea crude for September delivery dipped 57 cents to $107.45.
“The US dollar has strengthened and that puts some downward pressure on oil, but this is part of the volatility of the markets,” said Mr Victor Shum, an analyst with Purvin and Gertz energy consultancy in Singapore.
A stronger dollar makes dollar-priced oil more expensive, leading to softer demand and pushing prices lower.
Mr Shum added that oil price movements will largely be “depending on headlines”, referring to news that can influence investors’ behaviour.
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