Crude oil fell as the U.S. dollar extended gains versus the euro, reducing the appeal of commodities as a currency hedge. Oil had advanced earlier as Israeli warplanes bombarded Palestinian targets in the Gaza Strip, adding to speculation that the conflict may disrupt crude supplies from elsewhere in the Middle East. Iran, which backs Israel’s opponent Hamas, called on oil producers to halt shipments to allies of Israel. “This strengthening move in the dollar today should be bearish for oil,” said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich in Vienna. “There may be some fear this conflict will expand, and some oil-producing countries will be affected.” Oil for February delivery fell as much as 54 cents, or 1.2 percent, to $45.80 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $46.17 at 1:03 p.m. London time. The dollar rose against the euro and the yen on speculation President-elect Barack Obama’s fiscal stimulus will help the U.S. economy recover from the recession. The dollar strengthened to $1.3644 per euro at 7:02 a.m. in New York, from $1.3921 on Jan. 2.

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