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Oil drops on stronger dollar as euro fears persist
Source: Agencies |
November 27, 2010, Saturday
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OIL prices edged lower yesterday as the dollar strengthened due to concerns about Europe's debt crisis and as stock markets fell across the globe.
Benchmark oil for January delivery fell 10 cents to settle at US$83.76 a barrel on the New York Mercantile Exchange.
Prices had dipped below US$83 earlier in the session as traders focused on debt woes in Europe. Portugal's parliament approved a debt-reduction package and Ireland's banks suffered a string of credit downgrades. Investors are worried that the pain will spread to Spain, the continent's fourth-largest economy, and threaten the 16-nation euro.
A stronger dollar makes crude more expensive for investors holding other currencies and usually drives down oil futures.
The euro, used by 16 European countries, fell to US$1.3237 in late New York trading yesterday from US$1.3368 late Thursday, earlier dipping below US$1.32 for the first time since September 21. The British pound dropped to US$1.5602 from US$1.5760.
China's energy consumption has led growth in global oil demand this year, but investors are worried that recent measures aimed at containing inflation will undermine its economic expansion.
China's gross domestic product growth, which has averaged about 10 percent a year for the last five years, will likely slow next year to between 8 percent and 9 percent, Capital Economics said in a report.
In other Nymex trading, heating oil fell was about flat a US$2.32 a gallon.
Natural gas rose 1.1 cents to US$4.399 per 1,000 cubic feet.
In London, Brent crude dropped 30 cents to US$85.80 a barrel on the ICE Futures exchange.
Benchmark oil for January delivery fell 10 cents to settle at US$83.76 a barrel on the New York Mercantile Exchange.
Prices had dipped below US$83 earlier in the session as traders focused on debt woes in Europe. Portugal's parliament approved a debt-reduction package and Ireland's banks suffered a string of credit downgrades. Investors are worried that the pain will spread to Spain, the continent's fourth-largest economy, and threaten the 16-nation euro.
A stronger dollar makes crude more expensive for investors holding other currencies and usually drives down oil futures.
The euro, used by 16 European countries, fell to US$1.3237 in late New York trading yesterday from US$1.3368 late Thursday, earlier dipping below US$1.32 for the first time since September 21. The British pound dropped to US$1.5602 from US$1.5760.
China's energy consumption has led growth in global oil demand this year, but investors are worried that recent measures aimed at containing inflation will undermine its economic expansion.
China's gross domestic product growth, which has averaged about 10 percent a year for the last five years, will likely slow next year to between 8 percent and 9 percent, Capital Economics said in a report.
In other Nymex trading, heating oil fell was about flat a US$2.32 a gallon.
Natural gas rose 1.1 cents to US$4.399 per 1,000 cubic feet.
In London, Brent crude dropped 30 cents to US$85.80 a barrel on the ICE Futures exchange.
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