Oil remained lower in early trade as the dollar remained firm against the euro, and as supply fears in Nigeria and the North Sea, which last week helped send crude to a new record high near $120 a barrel, receded.
Oil slid amid a broad-based commodities sell-off yesterday as the dollar strengthened against the euro, supported by hopes that the worst effects of the credit crunch may already have been felt.
A firmer greenback makes dollar-priced commodities such as crude oil more expensive for holders of other currencies.
'As the dollar soared yesterday, hitting six-week highs against the euro, commodity prices plunged across the board, with crude, base metals, precious metals, and agriculturals, all losing ground,' said MF Global analyst Ed Meir.
'The dollar should continue to set the tone over the next few days, as commodity markets will no doubt be waiting to see whether this latest rebound has some legs to it, or if it is just another flash in the pan,' he added.
At 9:15 a.m., New York-traded West Texas Intermediate crude for June delivery was down 10 cents at $112.42 per barrel. Yesterday is hit $110.46, the lowest price since April 14.
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