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Oil falls as dollar strengthens
Source: Agencies |
March 2, 2010, Tuesday
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CRUDE oil futures gave back earlier gains yesterday and slid on a rising dollar and a manufacturing report that fell short of economists' expectations.
Oil prices got to US$80.62 a barrel on the New York Mercantile Exchange before falling back to settle at US$78.70, down 96 cents. On Friday, the contract added US$1.49 to settle at US$79.66. The US$80 level has been tough for oil to crack.
U.S. manufacturing output expanded in February for a seventh straight month, as factory output has provided one of the few areas of strength for the economy. Still, the growth in manufacturing activity slowed compared with January.
The Institute for Supply Management, a trade group of purchasing executives, said its manufacturing index read 56.5 last month. That was slower than the 58.4 reading in January. A reading above 50 indicates expansion.
A stronger dollar also was a drag on oil yesterday. Oil is traded in dollars on global markets and becomes more expensive for international investors who hold other currencies.
The dollar jumped to a 9-month high against the pound and extended its rise against the euro as worries about Greece's financial stability, a possible European bailout plan and uncertainty about U.K. government and debt sent investors to the U.S. currency's safety.
In trading in New York, the British pound tumbled below US$1.50 for the first time since May 2009. The 16-nation euro dropped to US$1.3574 from 1.3620 late Friday.
This week, investors will be eyeing U.S. jobs data to get a better sense of the recovery in the world's largest economy. The Labor Department is scheduled to announce February's unemployment rate on Friday. Joblessness was 9.7 percent in January.
Oil prices have touched the low US$80 level several times in the last six months, but fallen back into the US$70s when U.S. crude inventory data failed to justify investor optimism.
In other Nymex trading in April contracts, heating oil fell 1.18 cents to settle at US$2.0235 a gallon, and gasoline lost 3.23 cents to settle at US$2.1556 a gallon. Natural gas lost 13.4 cents to settle at US$4.679 per 1,000 cubic feet.
In London, Brent crude dropped 70 cents to settle at US$76.89 on the ICE futures exchange.
Oil prices got to US$80.62 a barrel on the New York Mercantile Exchange before falling back to settle at US$78.70, down 96 cents. On Friday, the contract added US$1.49 to settle at US$79.66. The US$80 level has been tough for oil to crack.
U.S. manufacturing output expanded in February for a seventh straight month, as factory output has provided one of the few areas of strength for the economy. Still, the growth in manufacturing activity slowed compared with January.
The Institute for Supply Management, a trade group of purchasing executives, said its manufacturing index read 56.5 last month. That was slower than the 58.4 reading in January. A reading above 50 indicates expansion.
A stronger dollar also was a drag on oil yesterday. Oil is traded in dollars on global markets and becomes more expensive for international investors who hold other currencies.
The dollar jumped to a 9-month high against the pound and extended its rise against the euro as worries about Greece's financial stability, a possible European bailout plan and uncertainty about U.K. government and debt sent investors to the U.S. currency's safety.
In trading in New York, the British pound tumbled below US$1.50 for the first time since May 2009. The 16-nation euro dropped to US$1.3574 from 1.3620 late Friday.
This week, investors will be eyeing U.S. jobs data to get a better sense of the recovery in the world's largest economy. The Labor Department is scheduled to announce February's unemployment rate on Friday. Joblessness was 9.7 percent in January.
Oil prices have touched the low US$80 level several times in the last six months, but fallen back into the US$70s when U.S. crude inventory data failed to justify investor optimism.
In other Nymex trading in April contracts, heating oil fell 1.18 cents to settle at US$2.0235 a gallon, and gasoline lost 3.23 cents to settle at US$2.1556 a gallon. Natural gas lost 13.4 cents to settle at US$4.679 per 1,000 cubic feet.
In London, Brent crude dropped 70 cents to settle at US$76.89 on the ICE futures exchange.
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