Oil Futures: Crude Prices Decline
Source: Dow Jones Newswires, Dan Strumpf (12/9/10)
"Weaker equities, rising dollar erased a boost in prices."
Light, sweet crude for January delivery fell $0.20, or 0.2%, at $88.08 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange lost $0.21, or 0.2%, at $90.56 a barrel.
The dollar strengthened against the euro on reports that the bailout of Ireland could face obstacles from the country's opposition party. The ICE Dollar Index, which tracks the greenback against a basket of trade-weighted currencies, rose to 80.365 from 79.997.
Crude often trades opposite the dollar, with a stronger greenback making the dollar-denominated commodity more expensive in other currencies.
Meanwhile, the Dow Jones Industrial Index was down 22 points to 11350 in morning trading.
Crude markets got a boost earlier in the trading day in New York by a better-than-expected report on U.S. jobless claims. The Labor Department said initial unemployment claims fell by 17,000 to 421,000 in the week ended Dec. 4. Economists surveyed by Dow Jones Newswires had expected claims would fall by 13,000.
Later this week, attention will turn to a meeting of the Organization of Petroleum Exporting Countries. The group, which produces roughly one-third of the world's oil, is widely expected to keep quotas unchanged. Still, market participants will be closely watching any reports from the group, which meets Saturday in Quito, Ecuador.
Traders also remain wary of the prospect of an interest rate hike in China this weekend. Any sign of an economic slowdown in China, the world's second-largest oil consumer, is likely to be bearish for oil prices.
Price moves in crude are likely to remain subdued ahead of clarity from OPEC and China, said Matt Smith, oil analyst with Summit Energy.