Oil down on stronger dollar, weak demand

19 March 2010

Written by John King

Crude oil prices were down on the New York Mercantile Exchange this morning (March 19th), with a rising dollar putting pressure on the commodity.

As European markets opened, crude was trading marginally below $82 (£54) a barrel, while heating oil was also down in this morning's electronic session.

The dollar climbed yesterday amid growing anxiety that Greece may not secure an emergency finance package from the European Union, despite finance ministers agreeing on a technical framework to support the country earlier this month.

A stronger dollar makes commodities such as crude and heating oil less attractive to foreign investors trading in different currencies.

Meanwhile, demand conditions for fuels in the US continued to weigh on traders' minds, said Ben Westmore, a minerals and energy economist at National Australia Bank, who pointed to lingering weakness in this week's inventories report from the Energy Information Administration.

He explained that there is still "a little bit of softness in the product demand".

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