Commodity Daily News

Oil Falls below $78.50

The price of crude oil fell on Monday on forecasts that tropical storm Alex will bypass the Gulf of Mexico's main oil producing region and BP's oil spill. The oil price had reached a seven-week high of $79.40 on earlier reports that Alex will become a hurricane in the next 48 hours.

The price was also dampened down by expectations that data due this week will show US consumer confidence waned and manufacturing growth slowed this month.

Moreover, a drop in the EUR against the dollar also has made oil a less appealing investment overseas. Crude is priced in dollars, so oil becomes more expensive for holders of other currencies when the dollar goes up. Analysts are concerned that the European debt crisis could slow down euro-zone economies and drag down demand for oil.