MW: Crude falls for third session on stronger dollar, lower stocks
By Moming Zhou,
NEW YORK (MarketWatch) - Crude-oil futures fell below $70 a barrel for the first time in a week Monday, as a stronger dollar weighed on commodities prices and as falling stocks dampened trading sentiment.
Investors were also awaiting an index of leading economic indicators due later in the morning and the Federal Reserve's two-day policy meeting starting Tuesday. Leaders of the world's most powerful economies will meet in Pittsburgh later this week for the Group of 20 summit.
The October crude contract, which expires Tuesday, fell $2.79, or 3.9%, to $69.25 a barrel in early North American electronic trading, moving below $70 for the first time since Sept. 14. The contract ended last week's trading up 4%.
Crude fell "amid weaker equities, stronger dollar and as risk appetite fell ahead of Fed meeting tomorrow and G20 summit this week," said analysts at Sucden Financial Research in a note.
Stocks moved broadly lower in Europe and Asia, and U.S. futures were also indicating a lower opening Monday.
In currencies trading, the dollar strengthened against most of its major rivals, rebounding from one-year lows. The dollar index (DXY 77.03, +0.48, +0.62%) gained 0.8% at 76.997. A stronger greenback tends to push down dollar-denominated commodities prices.
Energy investors were also concerned that the rally in oil prices, up more than 60% this year to reach a 10-month high of $75 a barrel on Aug. 25, may have been overdone as data showed demand still remained weak.
The Energy Information Administration said last week that gasoline demand in the U.S., the world's biggest energy consumer, fell to 9 million barrels a day in the week ended Sept. 11, down 3% from a week ago.
Total petroleum demand dropped to 19.1 million barrels a day, down 2.1% from a week ago, the EIA said. That's the lowest level since the week ended Aug. 7.
"Crude is now in a three-day losing streak as investors are likely concerned that current demand is not able to support higher prices," said Brian Niemiec, an analyst at Susquehanna Financial Group.
Also in energy trading, October reformulated gasoline gave up 8.23 cents, or 4.5%, to $1.7504 a gallon and October heating oil sank 6.99 cents, or 3.8%, to $1.758 a gallon.
October natural gas lost 14 cents, or 3.8%, to $3.637 per million British thermal units. Natural gas soared 28% last week, the biggest week gain in nearly three years.
