Crude oil fell for the first time in three days as the dollar strengthened against the euro, limiting the appeal of commodities as a currency hedge. Crude gained as the dollar rose to a three month high against the euro as Greece’s latest debt downgrade fanned concern that spiralling national debts may hamper the global economic recovery. The U.S. currency also gained after the Federal Reserve said yesterday the economy is strengthening and the deterioration in the labor market is abating.
“It is the dollar mainly because even though the Fed kept interest rates unchanged they did admit things are stabilizing in the U.S. economy,” said Andrey Kryuchenkov, a VTB Capital analyst in London. “Sentiment in the dollar is turning positive.” Crude oil for January delivery fell as much as $1.01, or 1.4 percent, to $71.65 a barrel in electronic trading on the New York Mercantile Exchange. It was at $72.05 a barrel at 11:35 a.m. London time. Yesterday, the contract added $1.97 to $72.66 in New York, the biggest gain in a month, after the Energy Department said U.S. crude inventories declined to the lowest since the week ended Jan. 9. Prices have gained 61 percent this year.....Read the entire article.
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