Oil stays above $78

LONDON (AFP) - World oil prices fell slightly on Tuesday as the dollar strengthened and after recent strong gains for crude partly spurred by hopes of improved energy demand, analysts said. New Yorks main contract, light sweet crude for December delivery eased two cents to 78.88 dollars a barrel. Brent North Sea crude for January delivery dipped 12 cents to $78.64 a barrel in London trading. The oil price remains glued to movements in the dollar, said analyst David Hufton at PVM Oil Associates. A stronger greenback makes dollar-denominated commodities like crude oil and gold more expensive for buyers using weaker currencies. That tends to reduce demand for such raw materials. In a separate development for the oil market on Tuesday, Nigerias main armed group accused the military of staging a dawn raid on a village in the restive crude-producing region, saying it could threaten the ongoing peace talks. The Movement for the Emancipation of the Niger Delta said the 6:00 am (0500 GMT) raid extensively destroyed the residence of its former commander Christian don Pedro. No arms were found, it said, describing the attack as an act of bad faith and a breach of the trust these ex-fighters placed in the Nigerian government with their voluntary surrender. Thousands of rebels who fought a two year oil war recently laid down arms in response to a government amnesty. At the peak of the unrest, output of crude by Nigeria, the worlds eighth-biggest exporter of oil, fell by a third. Following the amnesty deal which ended last month, Nigerias oil output has risen to around 1.9 million barrels per day, according to the International Energy Association. Crude prices had soared 2.50 dollars on Monday from a weak dollar and data showing that the Japanese economy expanded 1.2 percent in the July-September period. It was the second straight quarter of expansion in the worlds second-largest economy. Meanwhile, OPEC president Jose Maria Botelho de Vasconcelos has signalled that 75-80 dollar oil is an adequate level to allow for a global economic recovery. Seventy-five to 80 dollars a barrel is a good price... for the recovery of the world economy, de Vasconcelos, who is also Angolas oil minister, said at a Gulf energy security conference in Abu Dhabi on Monday. The Organization of Petroleum Exporting Countries (OPEC) pumps about 40 percent of the worlds oil.

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