Business

Published: Saturday November 21, 2009 MYT 11:10:00 AM

Oil prices drop below US$77 on economic doubt


NEW YORK: Oil prices fell below US$77 a barrel on Friday on a stronger dollar and amid concern about the strength of the global economic recovery.

Benchmark crude gave up 74 cents to settle at $76.72 a barrel on the last trading day for the December contract. Crude prices for January delivery lost 58 cents to settle at $77.47.

Crude prices were dragged down by uncertainty about the economic outlook, including concerns about deflation and a possible double-dip recession.

Oil has seesawed between $76 a barrel and $82 for about a month as the dollar - whose fall this year has help boost crude prices from $32 in December - stabilized somewhat during the last few weeks.

Investors often buy commodities such as oil as a hedge against a weaker dollar and inflation.

Wall Street stocks dropped for a third straight day Friday as investors grew increasingly uneasy about a rising dollar and spiking demand for the safest government debt.

A strengthening dollar curtails foreign demand for commodities, which are often traded in dollars. It also can depress U.S. exports, which become more expensive as the dollar rises.

On Thursday, the Labor Department said employers are still shedding jobs, and the Mortgage Bankers Association reported a surge in foreclosures.

However, some analysts expect Asian economic growth, led by China, to help offset a sluggish recovery in developed countries.

In other Nymex trading, heating oil fell 2.08 cents to settle at $1.9756 a gallon. Gasoline for December delivery added 1.11 cents to settle at $1.9806 a gallon.

Natural gas added 8.2 cents to settle at 4.424 cents per 1,000 cubic feet.

In London, Brent crude for December delivery fell 42 cents to $77.22 on the ICE Futures exchange. - AP


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