Oil slips below $79 as dollar strengthens, milder weather forecast
By Deborah Jian Lee, APFriday, January 15, 2010
Oil drops on stronger dollar, milder weather
NEW YORK — Oil prices fell for the fifth straight day Friday, dipping below $79 a barrel as the dollar strengthened and forecasters saw milder winter weather ahead.
Benchmark crude for February delivery slid 57 cents to $78.82 a barrel on the New York Mercantile Exchange.
The weather outlook for the next 10 days calls for above average temperatures across nearly all regions of the U.S., which should temper demand for heating oil.
Crude prices were pressured by a stronger dollar, making it more expensive for holders of foreign currencies to purchase oil, which is priced in U.S. dollars.
Prices also fell on concerns about weak consumer demand. The Labor Department reported that inflation-adjusted wages fell 1.6 percent last year, the sharpest drop since 1990 and well below the 2.7 percent inflation rate for the year. That came on the heels of data released Thursday showing a drop in retail sales in December.
In other Nymex trading in February contracts, heating oil fell 2.06 cents to $2.0623 a gallon and gasoline slid 1.52 cents to $2.0582 a gallon. Natural gas futures gained 7.5 cents to $5.663 per 1,000 cubic feet.
In London, Brent crude for February delivery fell 77 cents to $77.81 a barrel on the ICE Futures exchange.
Associated Press writers Pablo Gorondi in Budapest, Hungary and Alex Kennedy in Singapore contributed to this report.
