Crude oil declined for the first time in three days as the dollar gained against the euro, reducing the appeal of commodities as an alternative investment. Oil slipped as much as 2.1 percent after the euro weakened amid concern that the Greek financial crisis will trigger a default on debts by other European countries. Prices also dropped on forecasts that a government report tomorrow will show U.S. oil supplies increased last week.
“There’s a healthy amount of skepticism about both the global economic situation and sovereign debt problems in Europe,” said John Kilduff, a partner at Round Earth Capital, a New York based hedge fund that focuses on food and energy commodities. “This is leading to the revival of the dollar as a safe haven, which is hitting oil.”
Crude oil for April delivery fell 90 cents, or 1.1 percent, to $80.97 a barrel at 11:05 a.m. on the New York Mercantile Exchange. Yesterday, the contract rose 37 cents to $81.87, the highest settlement since Jan. 11.
Oil, equities and the dollar have rebounded from a year ago, when the Standard & Poor’s 500 Index fell to its lowest level since the collapse of Lehman Brothers Holdings Inc. Oil is up 72 percent, and the S&P Index has risen 68 percent since March 9 last year.
The greenback traded at $1.3573 per euro, up 0.4 percent from $1.3634 yesterday. It was the first increase in three days. “Economic concerns are hitting the oil market,” said Tom Bentz, a broker at BNP Paribas Commodity Futures Inc. in New York. “Worries about sovereign debt in Europe are seeping into the market and giving the dollar a boost”.....Read the entire article.
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