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Oil Report

Tokyo rubber falls as oil holds below record high

TOKYO, Feb 28 (Reuters) - Tokyo rubber futures slipped about 2 percent on Thursday as oil slid the previous day all-time high above $102 a barrel, spurring selling by funds.

The benchmark Tokyo Commodity Exchange rubber contract for August delivery <0#JRU:> fell 5.5 yen to 306.7 yen a kg, down 1.8 percent from the previous close.

U.S. crude oil prices CLc1 hovered near $100 per barrel after having fallen back from a record-high of $102.08 on Wednesday.

Oil was up 30 cents at $99.94 on the Globex electronic trade, a day after tumbling on data showing rising inventories in the United States, the world’s top consumer.

Rubber prices often benefit from high oil because investors expect expensive crude to encourage a shift to natural rubber from synthetic rubber, a petroleum product.

In currencies, the dollar eased slightly against the yen to 106.30 yen JPY= from around 106.50 yen in late U.S. trade, after dipping below 106 yen on Wednesday.

Supplies remain tight because Thailand, Indonesia and Malaysia, the world’s top suppliers, have reduced or suspended production due to seasonal factors.

While the market has been active, some investors have refrained from buying at such high prices. But analysts say prices are likely to remain steep over the next few weeks. (Reporting by Miho Yoshikawa; Editing by Eric Burroughs)

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