Crude oil declined the most in three months as the dollar strengthened against the euro, curbing the appeal of commodities to investors, and a slowdown in Chinese manufacturing sent global equities lower. Oil fell more than $3 a barrel as the dollar climbed to the highest level versus the common currency in a year on concern the Greek debt crisis will spread. A Chinese purchasing managers’ index fell to a six month low. Prices topped $87 a barrel for the first time in three weeks yesterday on signals the U.S. economic recovery is accelerating.
“Prices are considerably lower because the dollar is very strong and equities are being pounded,” said Addison Armstrong, director of market research at Tradition Energy, a Stamford, Connecticut based procurement adviser. “There’s been a strong reversal over the last 24 hours after we failed to hang above $87 for a second time.”
Crude oil for June delivery fell $3.05, or 3.5 percent, to $83.14 a barrel at 1:53 p.m. on the New York Mercantile Exchange. Oil dropped as much as 4.1 percent, the most since Feb. 4. Futures are up 4.8 percent this year.
Oil in New York rose as much as $1 a barrel yesterday to a 19 month high of $87.15 after the Institute for Supply Management’s factory index climbed to 60.4, the most since June 2004. Economists projected a gain to 60, based on a Bloomberg News survey. Prices last breached $87 on April 6 and 7. Brent oil for June settlement declined $3.05, or 3.4 percent, to $85.89 on the London based ICE Futures Europe exchange.
‘The Nasty Reality’
“Yesterday’s positive economic indicators have been overtaken by the nasty reality in Europe,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “It looks like oil will remain under pressure”....Read the entire article.
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