Crude drops as dollar climbs, demand concerns persist

18 March 2010

Written by Kim Bardsley

Crude oil prices lost ground for the first time in three days this morning (March 18th) after the dollar rose against other major currencies and concerns about demand resurfaced.

While the dollar rose sharply against the yen in the Asian trading session, investors moved out of crude and heating oil as margins of return withered, while a report from the US Energy Information Administration also weighed on trading.

Figures from the group showed that crude inventories climbed for the seventh week in a row last week, while refiners recorded a 4.2 per cent drop in product output, the largest decline seen since the week ending November 6th.

Speaking to Bloomberg, Clarence Chu, a trader with options dealer Hudson Capital Energy in Singapore, explained that traders were taking profit on crude this morning, pushing prices towards the $82-a-barrel mark.

"Demand is still pretty weak. The mentality is more optimistic but the big picture as a whole is that we're not in great shape," he explained.

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