Oil fell in Asian trade Wednesday as investors took profit after a recent rally sent prices to $80 for the first time in a year, analysts said.

New York's main contract, light sweet crude for December delivery, fell 47 cents to $78.65 a barrel.

The November contract, which expired Tuesday, briefly touched 80.05 — its highest since October 14, 2008 — before easing to close at $79.09.

Brent North Sea crude for December delivery was off 48 cents to $76.76.

A weak dollar and an upbeat mood about the global economic recovery are driving the surge in crude prices, analysts said.

"The global recession has ended and we expect the recovery to look impressive in many economies — notably the US, China and Japan — over the next few quarters," analysts from London-based Capital Economics consultancy said in a recent report.

"The upswing is driven by a mix of factors, notably the support from policy stimulus, the release of pent-up investment spending, the turn in the inventory cycle, lower headline inflation and, especially important for Asian exporters, the revival in world trade."

For the US economy, the world's biggest energy user, its gross domestic product is seen as growing 3.0-4.0 percent for a few quarters while full-year growth for 2010 is expected at 3.0 percent, Capital Economics said.

The weak dollar has also been a boost to crude. A weak dollar makes dollar-priced crude cheaper for holders of stronger foreign currencies, ramping up demand for oil.

In Asia trade, the euro bought $1.4923 against $1.4937 in New York. The dollar was trading at ¥90.74 in Tokyo by late morning, almost unchanged from levels seen late Tuesday in New York.

On Tuesday, the euro touched $1.4994, its highest level since August 2008.

AFP

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