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Oil price at six week low

Monday 23rd August 2010
As high U.S. inventories and a lack of hurricane activity in the Gulf of Mexico countered a weaker dollar, oil stayed close to a six-week low below $74 a barrel.

The market gained support from the weaker U.S. dollar, which makes oil cheaper for holders of other currencies and from a firmer start to the trading week by European equities.

Oil in New York ended last week at the lowest since early July, after prices touched an intraday low of $73.19. Prices have fallen more than 10 percent from an August 4 high of $82.97.

Even though forecasts are for the Atlantic hurricane season to be the most active in five years, there was little imminent threat of hurricane-related disruptions to oil output or refining in the Gulf of Mexico.

Tropical Storm Danielle formed over the mid-Atlantic on Sunday and could become a hurricane by Tuesday night, the U.S. National Hurricane Centre said, but it was headed for Bermuda, posing no threat to oil and gas infrastructure in the Gulf.

Investors' interest in oil diminished last week. Money managers cut net long crude oil positions on the New York Mercantile Exchange, the Commodity Futures Trading Commission said on Friday.

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