Thursday, 4 Feb 2010

Crude Oil Drops Below $73 a Barrel

Crude Oil drops the most in 6 months, bolstered by a drop in stocks and a strong Dollar. Oil fell as 5.8% as the greenback strengthened versus the EUR, curbing commodities' appeal as an alternate investment.

Crude oil for March delivery fell $4.30 to $72.68 a barrel in afternoon trading in New York. Oil declined as much as $4.48 to $72.50, and is heading for the biggest daily drop since July 29. Currently Oil trades around the $70.00 a barrel level.

The EUR sank to more than seven month lows against the USD and 8 month lows against the Yen Thursday, as European Central Bank President Jean-Claude Trichet was unable to relieve growing concerns over Greek sovereign debt. A decline in equities also added to the USD's and JPY's safe heaven appeal. The release of worse then expected Unemployment Claims data also benefited the Dollar as investor's viewed it as a preview to tomorrow's release of the Non Farm Payroll Data. This report is an important indicator of the pace of the economic recovery.

The EUR dropped 1% to $1.3759 from $1.3893 yesterday. It touched $1.3728, the least since May 21. The EUR fell 3.1% to 122.52 Yen from 126.42, after slumping as low as 121.59. The Japanese currency strengthened 2.2% to 89.05 versus the USD, from 90.98.