Crude oil fell to the lowest level in three weeks as the dollar gained against the euro, reducing the appeal of commodities. Oil dropped as much as 1.6 percent as the greenback climbed against the common currency after German investor confidence declined. A strong U.S. currency curbs demand for raw materials as an alternative investment. “The strong dollar is weighing on prices,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “There’s a growing recognition that the big run up in prices wasn’t strongly based.”
Crude oil for February delivery fell 36 cents, or 0.5 percent, to $77.64 a barrel on the New York Mercantile Exchange. Prices touched $76.76, the lowest level since Dec. 24. February futures expire tomorrow. The more active March contract dropped 44 cents, or 0.6 percent, to $77.93 a barrel. Yesterday’s trades will be combined with today’s because of the Martin Luther King Jr. holiday in the U.S.
“Once the stock market firmed up a bit you saw oil rise from its lows,” said Phil Flynn, vice president of research at PFGBest in Chicago. “We’re back to worrying about the economy. The oil market is following anything that gives us an idea of where the economy is going.” The Standard & Poor’s 500 Index increased 0.7 percent to 1,144.02. Oil futures dropped 5.7 percent last week, the first weekly decline in five, after U.S. crude oil and fuel inventories rose.....Read the entire article.
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