Monday, June 2, 2008

Oil steady at $127

Oil prices were little changed below $128 a barrel on Monday, with traders tracking the dollar for direction as fleeting Tropical Storm Arthur marked the start of the Atlantic hurricane season, shutting two Mexican oil ports.

US light, sweet crude oil futures dipped 14 cents to $127.21 a barrel by 2325 GMT. Prices fell by nearly $5 last week as traders took profits from the previous week's record high above $135 on concerns over demand.

Oil managed modest gains on Friday, as the dollar's recovery stalled. The dollar inched down against the yen early on Monday, but market fundamentals also vied for traders' attention.

Tropical Storm Arthur became this season's first in the Atlantic at the weekend, opening a June-November hurricane period that forecasters expect to be more active than usual, threatening US and Mexican oil facilities.

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