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Oil near 2-1/2-year peak on Middle East, weak dollar

Oil near 2-1/2-year peak on Middle East, weak dollar

Central bankers claim no influence on oil prices but history says otherwise. Meanwhile, the Euro hits 14-month high as Libyan rebels call on NATO for more strikes.

April 6, 2011 2:38 by

Singapore-based Serene Lim of ANZ said the impact from the hike would be mitigated by the turmoil in Libya.

“It is a stalemate in Libya and this will give support to oil prices, which are trading at a very tight range,” she said.

In Libya, the head of the rebel army said NATO had been too slow to order air strikes to protect civilians.

In Bahrain, firms have fired hundreds of mostly Shi’ite Muslim workers who went on strike to support pro-democracy protesters, an opposition group said on Tuesday, in what appeared to be part of a government crackdown.

A forecast for a rise in U.S. stockpiles due out later on Wednesday could dampen sentiment for U.S. crude.

“It is hardly surprising that U.S. oil is not able to keep up with the latest rally and is even tending a little softer,” analysts at Commerzbank said in a note.

“This is because the tensions in North Africa are largely behind the rise in prices while the supply situation in the U.S. essentially remains relaxed.”

Technical analysis showed Brent could rise above $126, said Reuters analyst Wang Tao.

Brent’s rally to above $120 a barrel could soon fizzle out, according to a majority of traders and analysts in a Reuters poll released on Wednesday. But they expected Brent to roar back above $130 in the second half of this year.

(Reporting by Dmitry Zhdannikov and Seng Li Peng; editing by Jason Neely and Keiron Henderson)

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