Oil market slips amid US holiday

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Oil prices slipped on Wednesday in light trade amid the Independence Day holiday in the United States, as dealers also took profits from a recent Iran-inspired rally and tracked the stronger dollar.

Brent North Sea crude for delivery in August shed 55 cents to $100.13 a barrel in London morning deals.

New York's main contract, light sweet crude for August, declined 46 cents to stand at $87.20 in electronic deals.

Traders were also looking ahead to interest rate decisions from both the Bank of England and the European Central Bank (ECB) on Thursday.

“We expect thin trading volumes today as the US markets are closed, while investors remain cautious ahead of the ECB decisions and the release of the US non-farm payroll later this week,” said Sucden analyst Myrto Sokou.

“Crude oil prices reversed from yesterday's gains and slid lower, as the strengthening US dollar weighed on prices.”

The stronger greenback makes dollar-priced crude more expensive for buyers using weaker currencies. That tends to weigh on demand and pull prices lower.

Oil had rallied sharply Tuesday on fresh tensions over supplies from key crude producer Iran, after the Islamic republic was hit by European Union oil sanctions.

Full implementation of an EU embargo on Iranian oil, which took effect on Sunday, provoked anger in Tehran, which said the measures would hurt talks with world powers over its disputed nuclear activities.

On Tuesday, Iran test-fired missiles into its central desert region, drawing a US warning that the tests were in violation of UN resolutions that ban Iran from any ballistic weapons activity.

Meanwhile, some 120 lawmakers in Iran's 290-seat parliament backed a draft bill calling for the strategic Strait of Hormuz to be closed to oil tankers headed to Europe in retaliation for the EU embargo. -Sapa-AFP