Oil moves lower on dollar strength, economy concerns

16 April 2010

Written by John King

Crude oil prices moved lower on the New York Mercantile Exchange for a second day this morning (April 16th), with a stronger dollar dampening the appeal of the commodity for foreign investors.

The headline crude futures contract was trading below $85 (£55) a barrel as European markets opened, while heating oil prices also moved lower on the exchange.

Earlier this week, the commodities had gained on signs of demand improvement, but weak macroeconomic data from the US weighed on prices. While weekly jobless claims figures rose unexpectedly, industrial output was also below expectations in March.

Speaking to Bloomberg, Victor Shum, a senior principal at US energy consultants Purvin & Gertz in Singapore, commented: "We're likely to find some support in the near term around the mid-$80s, although the fundamentals still don't really support these prices."

He added that persistent concerns about Greece's ability to manage its debts also weighed on crude, as this pushed the dollar higher against the single currency.

Click here for a home heating oil quote