RTRS: Oil falls below $49 on firm dollar, risk aversion
Oil fell more than 3 percent to below $49 a barrel on Monday, weighed down by a rising U.S. dollar and growing caution about the pace of any economic recovery.
President Barack Obama said on Sunday the U.S. economy remained under strain and his top economic adviser tempered hopes for a speedy recovery that have driven the stock market to successive gains.
U.S. crude for May delivery was down $1.83 to $48.50 a barrel by 0922 GMT. London Brent crude for June fell $1.35 to
$52.00.
"It's a little bit weaker because of the stronger dollar but still in the same range of $50-$55," said Christopher Bellew, a broker at Bache Commodities, referring to Brent.
"There's still so much bearish fundamental data it's hard to see it rising that much."
The euro hit a one-month low against the dollar and a three-week trough versus the yen on Monday due to uncertainty over policy steps the European Central Bank may take.
A rising dollar can limit the appeal of commodities and oil to some investors.
"The pullback is largely due to a stronger U.S. dollar. There is also increased risk aversion following cautious comments from U.S. officials over the weekend," said Michelle Kwek, an analyst at Informa Global Markets in Singapore.
CAUTION ON ECONOMY
Oil's gains toward the end of last week were buoyed by optimism that the U.S. economy was recovering.
But President Obama said on Sunday the economy remained under strain, and his top economic adviser Paul Volcker cautioned that the country's recovery would be a "long slog."
The International Monetary Fund also sounded a cautious note. Its Managing Director Dominique Strauss-Kahn said the agency would cut its global economic forecasts in the coming week. He expected a recovery to start in the first half of next year.
Oil has fallen nearly $100 from its record high of over $147 last July, but has flattened out to trade around $50 for most of this month in part due to supply cuts by the Organization of the Petroleum Exporting Countries.
The bright spot for commodities remains China, with a government researcher writing in the official China Securities Journal that the economy of the world's No.2 oil consumer is bottoming out.
Refined fuel inventories held by the country's oil duopoly fell 14.7 percent at the end of March from a month ago, and sales rose 21 percent in the same period, providing signs of improving fuel demand.
