Crude oil was little changed as Russia called off military action in Georgia and the dollar dropped from a 5 1/2-month high against the euro, curbing the appeal of commodities as an inflation hedge.
Crude oil for September delivery fell to $112.31 a barrel on the New York Mercantile Exchange at the time of going to the Press. Futures touched $112.48 earlier on Tuesday, the lowest since May 2. Prices are up 60 per cent from a year ago.
Prices rebounded after Russian President Dmitry Medvedev announced the end to the five-day offensive in Georgia, a country that connects the oil-rich Caspian Sea region with world markets. BP stopped pumping oil into a pipeline from Azerbaijan to the Black Sea coast because of concern over security.
“Medvedev’s calling for an end of hostilities has taken away some of the appeal of the dollar as a safe haven,’’ said Michael Fitzpatrick, the vice-president for energy risk management at MF Global in New York. “This, combined with BP shutting a pipeline, has pushed prices higher.’’
The dollar declined 0.1 per cent to $1.4923 per euro at 9:02 am in New York, from $1.4909 yesterday. It touched $1.4816, the strongest since February 26.
