Crude oil tumbled to a 12 week low in New York as the strengthening dollar curbed the appeal of commodities as an alternative investment. Oil slipped as much as 2.7 percent as the U.S. currency climbed against the euro after Portugal announced austerity measures, spurring concern that fiscal tightening across Europe will limit economic growth. A U.S. Energy Department report yesterday showed that crude supplies rose 0.5 percent to 362.5 million barrels.
“We’ve been very sensitive to what’s happening on the currency side since the recession began,” said Phil Flynn, vice president of research at PFGBest in Chicago. “There’s been a new focus on currency markets since the crisis started in Europe.”
Crude oil for June delivery fell $1.47, or 2 percent, to $74.18 a barrel at 10:22 a.m. on the New York Mercantile Exchange. Futures touched $73.62, the lowest level since Feb. 12. Prices are down 6.5 percent this year.
The greenback advanced to $1.2558 per euro, up 0.4 percent from $1.2614 yesterday. It touched $1.2529 on May 6, the highest level since March 2009. Europe’s common currency has dropped 1.5 percent against the dollar this week, following the EU’s plan to shore up the region’s finances. The package included a pledge from the European Central Bank to buy government and private bonds to stem a surge in borrowing costs among so called peripheral nations such as Greece, Spain and Portugal.....Read the entire article.
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