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Crude down as dollar finds legs

Upstreamonline: Crude down as dollar finds legs

By Upstream staff

US crude futures slipped below $110 a barrel today as the dollar strengthened following an unexpected warning from the Group of Seven nations against excessive currency fluctations.

Nymex crude for May delivery fell 44 cents a barrel to $109.70 in Globex electronic trading by 2213 GMT after having gained three cents on Friday. Prices hit a record high $112.21 a barrel on Wednesday after US government data showed a big drop in US crude and fuel stocks, Reuters reported.

After meeting on Friday, G7 finance ministers and central bankers issued a statement saying they were concerned by the sharp moves in foreign exchange markets in recent weeks. That was a marked change in their tone and was taken as a warning that the dollar was falling too fast.

The euro was trading at $1.5701, having slid from $1.5835 late in New York on Friday. Gains in oil and commodity markets have been fuelled in part by investors and speculators seeking a hedge against inflation and the falling dollar.

On Friday the dollar had fallen following weak consumer confidence data, offsetting the bearish impact of the sharpest one-off cut in the International Energy Agency’s global oil demand growth forecast since 2001.

The advisor to 27 industrialised nations slashed its 2008 global oil consumption forecast by 460,000 barrels per day to 1.27 million bpd due to the faltering US economy, but said demand from China and the Middle East should hold up.

Shell Oil said the 667-mile (1073-kilometer) Capline crude pipeline, which brings oil from the Gulf of Mexico to the US Midwest, remained shut yesterday afternoon as work continued to repair a leak in Tennessee. It could not estimate when the line would return to service.

14 April 2008 00:22 GMT  | last updated: 14 April 2008 00:22 GMT and its also non-profit sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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