SINGAPORE, (AP) — Oil prices hovered above $71 a barrel Friday in Asia as the U.S. dollar rebounded.
Benchmark crude for November delivery was down 39 cents at $71.30 by late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract added $2.12 to settle at $71.69 on Thursday.
Oil has bounced in a range between $65 and $75 for months amid signs a recovery of the U.S. economy could be slow and uneven.
A weakening dollar has helped support crude prices as investors pour money into commodities on concern that the surge in stimulus spending will eventually spark inflation.
“People are using crude and gold as an inflation hedge because the U.S. is just printing money,” said Clarence Chu, a trader at market maker Hudson Capital Energy in Singapore. “There’s definitely been a negative correlation between the dollar and oil.”
The euro fell to $1.4743 on Friday from $1.4791 the previous day, and the dollar rose to 88.85 yen from 88.37.
Oil prices will likely trade near $70 until there are more positive economic signs, such as job creation, Chu said.
“There hasn’t been a strong signal that the economy is recovering,” Chu said. “There are still job losses every month.”
The U.S. unemployment rate rose to 9.8 percent in September, the highest since 1983.
In other Nymex trading, heating oil fell 0.85 cents to $1.84 a gallon. Gasoline for November delivery dropped 0.52 cents to $1.77 a gallon. Natural gas for November delivery slid 1.7 cents to $4.95 per 1,000 cubic feet.
In London, Brent crude fell 34 cents to $69.43 on the ICE Futures exchange.