Oil rose in Asian trade Wednesday, lifted by a weak US dollar which came under more pressure after a report that Gulf states considered dropping the greenback for oil transactions, analysts said.

New York's main contract, light sweet crude for November delivery, was 55 cents higher at $71.43 a barrel.

Brent North Sea crude for November delivery rose 59 cents to $69.15.

"The soft tone of the US dollar supported the oil price," analysts from the Commonwealth Bank of Australia said in a report.

A weak dollar usually boosts crude prices because the dollar-denominated commodity becomes cheaper for foreign buyers holding stronger currencies.

Britain's Independent newspaper reported Tuesday that Gulf countries had held secret meetings with officials outside the region to discuss dropping the dollar for oil trade.

The countries would instead use a basket of currencies, including the yen, the paper said, citing Gulf Arab and Chinese banking sources in Hong Kong.

The report increased recent negative sentiment toward the dollar despite immediate denial of such a plan by Saudi Arabia, Russia, the UAE, Algeria, Qatar and Kuwait.

"The US dollar fell, partly as risk appetite led to acceleration of the carry trade, and partly on media reports that Arab oil producers may switch to pricing crude in a basket of currencies rather than the greenback," said Dariusz Kowalczyk, chief investment strategist with SJS Markets financial firm.

In late US trading Tuesday, the dollar fell to ¥88.82 from ¥89.51 on Monday while the euro rose to $1.4715 from $1.4648.

Separately, traders are waiting for the release later Wednesday of a weekly oil stockpiles report by the US Department of Energy to assess the demand situation in the US economy, the world's biggest oil user.

Analysts questioned in a Dow Jones Newswires poll said they expected crude stocks to rise by 1.7 million barrels in the week to October 2 while petrol reserves are seen to increase by 600 000 barrels.

AFP

Tax rates shocker? A rise in tax rates in 2010/11 could be anticipated in order to finance increasing national debt.

Milking the stadium cow The Mandela Bay's R2.2bn soccer stadium is expected to rake in R20-million a year after 2010.

To cut or not to cut? The central bank has a tough balancing act to perform. Will Tito cut interest rates?