Dollar Gains with Lower Crude Oil Prices

Crude oil prices fell in the recent electronic trading after running a good record for three days due to the strong dollar and the weak stock indexes of the U.S. that pointed toward a possibly low Wall Street opening.

Crude futures for delivery in March dropped by 0.4% or 37 cents to end at an oil price per barrel of $99.47. In the recently held regular session of the New York Mercantile Exchange, the front month contract had a rise of $1.13. That was driven by relief on news that the political leaders of Greece already reached an agreement for austerity measures.

The recent fall in crude oil prices occurred as several analysts pointed to the long term impact of the sovereign debt crisis to the economy.

Citi Futures Perspective analyst Timothy Evans said that even if disorderly instability and financial crisis is removed from the picture, it seems that it will still lead to a similar downside risk on the prospects of growth. He added that the austerity measure will be contractionary elsewhere, but most of all in Greece. Traders stay reluctant to put much of their focus on the market’s direct fundamentals, but this keeps on flashing indications of weaknesses.

Among other products of energy, gasoline prices for March reduced by 0.2% to reach $3.01 per gallon. Heating oil costs for March were flat at a per gallon price of $3.21.

Natural gas futures for March fell by 0.4% to reach $2.47 for every million British thermal units. The U.S dollar advanced versus majority of currency rivals to recover some of its latest losses. In the meantime, the average Dow Jones Industrial futures fell by 0.3% to 43 points, to 12,799.

By Chris Termeer

Chris Termeer

Chris Termeer is an oil and gas consultant, industry commentator and analyst. His book, Fundamentals of Investing in Oil and Gas provides a comprehensive overview of all aspects of the oil and gas industry, including exploration, drilling, production, storage, transportation and refining, to name but a few.

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