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Oil slips as dollar leaps ahead

Singapore - Crude was slightly lower in Asian trade on Thursday as the dollar strengthened but was supported by positive economic news from key regions and a cold snap in Europe, analysts said.

New York's main contract, light sweet crude for January delivery, shed 7 cents to $86.68 per barrel in the afternoon.

Brent North Sea crude for January delivery dipped 18c to $88.69.

Oil prices were slackening in Asia due to "some profit-taking prompted by the movement of the dollar", said Victor Shum, senior principal of Purvin and Gertz energy consultants in Singapore.

The US dollar gained against the euro in afternoon Asian trade, with the single European currency trading at $1.3106 compared with $1.3138 in late US trade.

However, Shum voiced confidence that oil prices would move upwards in the near term.

"I think pricing in the near term is likely to stay strong... what has supported the rally in oil futures is really good economic news from across the globe," he added.

Strong US, Chinese and European manufacturing data were providing support for oil markets, and continued freezing weather in Europe would keep oil demand healthy in the near term, Shum stated.

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