Oil prices rise as dollar weakens

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Oil prices rose on Tuesday as the dollar weakened against the euro, boosting demand for crude as investors looked ahead to the start of the latest corporate earnings season, analysts said.

New York's main contract, light sweet crude for delivery in February, gained 34 cents to $93.53 a barrel.

Brent North Sea crude for February climbed 56 cents to $111.96 per barrel.

Crude oil has risen “on improving risk appetite and weaker US dollar,” said Fawad Razaqzada, an analyst at GFT Markets trading group.

The euro firmed against the dollar on Tuesday, making oil priced in the US unit cheaper for holders of rival currencies, boosting demand.

IG Markets analyst Jason Hughes said that traders were looking for guidance ahead of the corporate earnings season, especially for companies in the United States, the world's biggest economy and largest oil-consuming nation.

Other analysts said there were also lingering concerns about the looming debates in the deeply divided US Congress over raising the country's debt ceiling and spending cuts.

Oil prices surged last week when feuding Republican and Democrat lawmakers clinched a deal to avert a “fiscal cliff” of automatic spending cuts and across-the-board tax hikes.

But agreement on the cuts was simply deferred until the end of February, when lawmakers must also hammer out a deal to raise the country's borrowing limit, raising the spectre of further political gridlock.

“Unless Congress extends the debt limit, the fiscal cliff that threatened in December will look like kid stuff,” DBS Group Research said in a market commentary. - Sapa-AFP


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