Oil tumbling on strong dollar, storm landfall

7 September 2010

Written by John King

Crude oil prices lost more than 1.5 per cent in electronic trading on the New York Mercantile Exchange this morning (September 7th) as overseas investors bemoaned the rise of the dollar.

A stronger dollar usually has a downward impact on crude and heating oil prices as the commodities become less attractive to foreign buyers.

Meanwhile, price falls were also exacerbated as Tropical Storm Hermine made landfall near the Mexico-Texas border, having passed through the Gulf of Mexico without causing disruption to oil and gas production.

With crude futures changing hands for $73.52 a barrel at 02:50 Central Standard Time this morning, down 1.08 cents, Ken Hasegawa, a commodity derivatives manager at brokerage Newedge in Japan, told Reuters the market appears content with the price.

"Crude oil to some extent will have influence from financial markets, but it is completely stuck in a range from $70 to $80. It's very comfortable for everyone," he said.

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