Crude Falls Below $78 a Barrel


". . .crude prices could sink further especially if the Greece situation worsens."

Crude-oil futures fell more than 3% Thursday after a surprise increase in weekly jobless claims fed concerns about U.S. energy demand, and as the dollar rose, curbing demand for commodities as an alternative investment.

"There's a lot of fear out in the market today, and crude prices could sink further especially if the Greece situation worsens," said Zachary Oxman, managing director at TrendMax Futures.

The storm that moved into the East Coast offered some support.

"The fundamentals are bearish, the weather is the one bullish factor," said Oxman.

Crude for April delivery tumbled $2.71, or 3.4%, to $77.29 a barrel.

Natural-gas futures trimmed losses after the government reported a drop in inventories last week.

The Energy Information Administration said natural gas in storage fell 172 billion cubic feet to 1,853 billion cubic feet, with the decline more than expected.

Natural gas for April delivery fell 9 cents, or 2%, to $4.76 per million British thermal units.

The divergence between gold and stock prices is a reason for caution, Oxman added.

"We haven't seen this in 2010, such a big move down in stocks and move up in gold, for the last 15 months they've been highly correlated. The volume of selling coming into stocks and the decent volume coming into gold puts me on guard," he said.

Gold futures were up $4, or 0.4%, at $1,101.2 an ounce, while the major stock indexes were down about 1.5%.

Early in the New York trading session, the U.S. government said weekly jobless claims unexpectedly rose by 22,000, instead of the expectation for a drop of about 39,000.

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