New York - Arabstoday
Oil seems to be stuck at $100 per barrel. Despite more gloomy economic reports, benchmark West Texas Intermediate crude on Friday settled just about where it began the day: down 18 cents at $100.22 per barrel. Oil has hovered around the $100 (Dh367) mark since early May. \"It\'s like there\'s a magnet on that $100 level,\" independent oil analyst Jim Ritterbusch said. \"As soon as we get $2, $3 away in either direction, it snaps back.\" Opposite directions One reason for the relative stability of oil is its relationship to the dollar. Crude is priced in US currency, so oil and the dollar often move in opposite directions. When the dollar rises, for example, it makes oil more expensive for investors holding foreign currency, and oil prices fall. When the US Dollar Index slipped 0.8 per cent Friday in afternoon trading, the weaker dollar buoyed oil futures, keeping prices from falling further. Oil withstood a steady parade of anaemic readings last week for US housing, manufacturing, retail sales, consumer confidence, and petroleum demand. As the summer driving season began, the government said oil supplies grew while Americans pumped less gas. The Labour Department\'s jobs report on Friday was the latest in a series of disappointing economic data. The US added 54,000 jobs in May, the fewest in eight months. During the previous three months, the economy added an average of 220,000 jobs per month. Manufacturers cut 5,000 jobs, retailers slashed 8,500 positions and leisure and hospitality businesses dropped 6,000 jobs. Lackluster hiring could mean fewer drivers on the road and gasoline consumption may continue to slide this summer. PFGBest analyst Phil Flynn said the sluggish economy should eventually push down the price of oil, perhaps as much as $20 per barrel. Increase production Prices could tumble this week if China raises its interest rates again to slow its economy. China is the world\'s second biggest oil consumer behind the United States. And Opec ministers may agree to increase oil production at a meeting scheduled for Wednesday. Rising global supplies would also tend to keep prices lower.