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Oil up near $75 in Europe as dollar weakens

Oil prices rose to near $75 a barrel on Monday, as the effects of a weaker dollar offset falls in stock markets over President Barack Obama’s plans to restrict big banks.

By early afternoon in Europe, benchmark crude for March delivery was up 23 cents to $74.77 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost $1.54 to settle at $74.54 on Friday.

The Dow Jones industrial average fell for a third straight day on Friday, losing 4.1 percent over the week. It was the worst showing for the market since it began its recovery last March, partly due to disappointing earnings results and Obama’s plan for tighter regulations.

Most Asian and European stock markets also were slightly lower Monday.

“The plan has caused both equities and commodities to consolidate considerably last week. Details of the plan aren’t available but as more news come out, we can expect a lot of volatility in oil pricing,” said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore.

He said the correction was not unusual and some traders may view the lower prices as a buy opportunity.

More earning reports expected this week, including from Microsoft Corp., Apple Inc. and Procter & Gamble Co., will provide indications of economic activities and a new direction for oil pricing, he added.

So far, U.S. earnings reports have been mixed, and upbeat earnings Friday from General Electric Co. and McDonald’s Corp. weren’t enough to sway investors.

A weaker dollar helped the rebound in oil prices, making crude cheaper for investors holding strengthening currencies.

The euro rose to $1.4172 on Monday from $1.4028 late Friday in New York, while the British pound was up to $1.6146 from $1.6084.

Obama spooked the market last week by asking Congress for curbs on the size of banks and an end to some of the risky trading large financial companies have used in recent quarters to boost their profits. Obama’s push for tighter regulations comes at the same time China is moving to cool its economy by reining in lending and stepping up regulatory oversight of that country’s banks.

JBC Energy in Vienna pointed to a report about oil export disruptions in Mexico caused by bad weather – which led to the close of one of the country’s three export terminals – as another bullish factor for oil prices on Monday.

In other Nymex trading in March contracts, heating oil rose 1.39 cents to $1.9555 a gallon. For February contracts, gasoline added 0.29 cent to $1.9686 a gallon while natural gas futures fell 5.4 cents to $5.765 per 1,000 cubic feet.

“Winter is back on both side of the Atlantic, but there are only about five to six weeks of the season left and with the high level of stocks still available, supplies of distillates … will not have been challenged,” said analyst Oliver Jakob of Petromatrix in Switzerland.

In London, Brent crude for March delivery rose 44 cents to $73.27 a barrel on the ICE Futures exchange.

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