Oil prices held steady around $71 a barrel today, consolidating the previous session's dollar-driven 4.5 per cent rally as investors waited for an OPEC meeting to conclude and fresh US inventory data.
The dollar index shed more than 1 per cent yesterday to hit a one-year low of 77.05, after breaking major chart support. The euro was up around $1.4507, having risen 1 per cent yesterday to end at $1.4490 in New York, and having touched its highest this year.
"This is very much in a dollar-driven, inflation-driven, hysteria-driven market," MF Global commodity and energy analyst Edward Meir said.
"Oil looks terrible on the charts. OPEC will likely leave things unchanged and will end the meeting with exhortations to stick to quotas. There is potential weakness, yet we saw the biggest move in a month."
NYMEX crude for October delivery stood at $71.04 a barrel by 3.15am, down 6 cents from yesterday's settlement. London Brent crude fell 18 cents to $69.24 a barrel.
US crude rallied 4.5 per cent by yesterday's settlement from the previous settle on Friday. With prices more-or-less flat and no settlement on Monday due to the Labor day holiday, the gains are the biggest since mid-August.
Crude prices, although up 50 per cent so far this year, are still less than half their peak struck in July 2008, a level that OPEC kingpin Saudi Arabia said both producers and consumers are happy with.
The Organization of the Petroleum Exporting Countries (OPEC) is meeting in Vienna today, and comments from officials suggest it is likely to keep the official output target stable.
Reuters