MW: Oil futures rise above $73 a barrel as dollar edges lower
By Polya Lesova, MarketWatch
FRANKFURT (MarketWatch) -- Crude futures rose above $73 a barrel on Friday, as the U.S. dollar traded lower against most of its rivals, boosting the appeal of dollar-denominated commodities such as oil.
Crude oil for January delivery gained 80 cents, or 1%, to $73.45 a barrel in electronic trading on Globex. The contract expires at the end of trading on Monday.
The more actively traded February contract rose 43 cents to $74.51 a barrel.
Oil futures finished virtually flat on Thursday.
The dollar index (DXY 77.53, -0.16, -0.21%) , which measures the performance of the greenback against a basket of other major currencies, fell 0.2% to 77.544 in recent trading.
The dollar and oil prices have had a strong inverse relationship in recent months; when the dollar falls, oil prices tend to rise.
Despite Friday's decline, the greenback has recently strengthened overall, rallying to its highest level in more than three months on Thursday. The dollar found support from a rush to safety spurred by concerns about Greece's debt payments and a reassessment of when the Federal Reserve could begin to tighten U.S. monetary policy.
"Given the ferocity of the dollar rally and our view that the greenback should continue to strengthen even further heading into the year-end, we would be inclined to lean more towards the short side for the next few days," wrote Edward Meir, senior commodity analyst at MF Global, in a note to clients.
Investors are also awaiting the meeting of the Organization of the Petroleum Exporting Countries, which will take place in Angola on Tuesday. The oil cartel isn't expected to announce any changes to production levels.
"Although the cartel's decision is well-discounted by now, we might see the markets weaken once the actual announcement comes out, as it will only reinforce how behind the curve OPEC really is," Meir said.
Also on Globex Friday, January natural-gas futures gained 9 cents, or 1.6%, to $5.86 per million British thermal units.
Natural-gas prices rose more than 5% Thursday, after a report showed weekly U.S. stockpiles dropped sharply as cold temperatures across much of the nation boosted use of heating fuels.
