Oil falls to near $94 as US dollar strengthens

AP News
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Posted: Jul 12, 2011 12:45 AM
Oil falls to near $94 as US dollar strengthens

Oil prices fell to near $94 a barrel Tuesday in Asia as a stronger U.S. dollar made commodities such as crude more expensive for investors with other currencies.

Benchmark oil for August delivery was down 69 cents to $94.46 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. Crude fell $1.05 to settle at $95.15 on Monday.

In London, Brent crude fell 9 cents to $117.15 per barrel on the ICE Futures exchange.

The euro fell to $1.3953 on Tuesday from $1.4048 late Monday.

"The dollar may be getting ready to rally over an extended period," Cameron Hanover said in a report. "The bigger question is whether the oil market will follow the euro, as it has done for most of the last four years or so."

The euro has weakened in recent weeks amid concern that the Greek debt crisis could spread to Italy, Spain, Portugal and Ireland. On Monday, European officials disagreed over a second bailout package for Greece.

"The focus has shifted from Greece to Italy and it seems that one of the southern European countries is going to pose a problem," Cameron Hanover said.

In other Nymex trading in August contracts, heating oil fell 1.2 cents to $3.08 a gallon while gasoline dropped 1.2 cents at $3.06 a gallon. Natural gas futures added 0.7 cent at $4.30 per 1,000 cubic feet.