Tuesday, November 3rd, 2009
Oil edges down toward US$76 amid economic uncertainty, rising U.S. dollar
NEW YORK - Oil prices fell below US$77 a barrel on Friday on a stronger U.S. dollar and amid concern about the strength of the global economic recovery.
Benchmark crude gave up 74 cents to settle at $76.72 a barrel on the last trading day for the December contract. Crude prices for January delivery lost 58 cents to settle at $77.47.
Crude prices were dragged down by uncertainty about the economic outlook, including concerns about deflation and a possible double-dip recession.
Oil has see-sawed between $76 a barrel and $82 for about a month as the dollar - whose fall this year has help boost crude prices from $32 in December - stabilized somewhat during the last few weeks. Investors often buy commodities such as oil as a hedge against a weaker U.S. dollar and inflation.
Wall Street stocks dropped for a third straight day Friday as investors grew increasingly uneasy about a rising dollar and spiking demand for the safest government debt.
A strengthening U.S. dollar curtails foreign demand for commodities, which are often traded in dollars. It also can depress U.S. exports, which become more expensive as the U.S. dollar rises.
On Thursday, the U.S. Labour Department said employers are still shedding jobs, and the Mortgage Bankers Association reported a surge in foreclosures. However, some analysts expect Asian economic growth, led by China, to help offset a sluggish recovery in developed countries.
In other Nymex trading, heating oil fell 2.08 cents to settle at $1.9756 a gallon. Gasoline for December delivery added 1.11 cents to settle at $1.9806 a gallon. Natural gas added 8.2 cents to settle at 4.424 cents per 1,000 cubic feet.
In London, Brent crude for December delivery fell 42 cents to $77.22 on the ICE Futures exchange.
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Associated Press Writer Barry Hatton in Portugal contributed to this report.
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