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Oil holds above US$60 amid weakening US dollar

CRUDE oil futures held above US$61 a barrel yesterday, helped by a weakening dollar and renewed fighting between the government and rebels in oil-rich Nigeria, Africa's largest oil producer.

Benchmark crude for July delivery rose 62 cents to settle at US$61.67 a barrel in light, pre-holiday trading on the New York Mercantile Exchange. In London, Brent prices increased 85 cents to settle at US$60.78 a barrel on the ICE Futures exchange.

Crude prices have held around US$60, partly due to the falling value of the dollar. Crude is priced in dollars, so it becomes cheaper on international markets when the dollar falls.

The dollar fell yesterday to a four-month low against the euro. By midday, it was trading at US$1.3979. The dollar bought 94.67 yen, down from 99 yen two weeks ago.

Oil supplies have been in flux recently. OPEC countries have boosted exports by an estimated 200,000 barrels a day in the four weeks to June 6, according to tanker tracker Oil Movements.

Analyst Addison Armstrong also noted that Nigerian crude production dwindled to half the country's total capacity in April amid renewed fighting with militants who want to remove all oil workers from the region.

In other Nymex trading, gasoline for June delivery rose 4.11 cents to settle at US$1.8408 a gallon and heating oil added less than a penny to settle at US$1.538 a gallon. Natural gas for June delivery dropped 8.8 cents to settle at US$3.515 per 1,000 cubic feet.


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