Oil Gains on Weak Dollar

NEW YORK, Jul. 27 -- Crude prices gained on Tuesday as the pricing dollar weakened against its major counterparts caused by impasse of U.S. debt ceiling talks.

The dollar slumped against a basket of currencies as President Barack Obama and Republicans remained divided on raising debt ceiling. Investors were wary of U.S. credit ratings downgrade and a possible debt default if there would be no agreement reached before the deadline of Aug. 2.

The dollar slipped to a record low against the Swiss franc, the traditional safe heaven, and to a four-month low against the Japanese yen and even dipped almost 1 percent against the also struggling euro.

The dollar index, tracking the greenback's performance against six major currencies, fell about 0.8 percent. A weakening dollar made oil more attractive.

Better-than-expected U.S. consumer confidence also provided some support for oil. According to the Conference Board, the consumer confidence index in July rose to 59.5 from a revised 57.6 in June.

But the stalled debt ceiling talks also weighed in the crude markets. Investors remained concerned about the negative outcome of U.S. and world economy coming from the debt negotiation collapse.

Light, sweet crude for September delivery gained 39 cents, or 0. 39 percent to settle at 99.59 dollars a barrel on the New York Mercantile Exchange. In London, Brent crude for September delivery also rose and last traded above 118 dollars a barrel.