LONDON—Crude-oil futures are lower Friday as traders continue to take their cue from a firm dollar in the absence of bullish economic news.
The euro resumed the downtrend against the dollar in Europe Friday morning mainly due to growing concern over Greece's debt problem. Traders are worried the Greek debt crisis, as well as deficit problems in other European countries, may continue to pressure the euro for a long time.
Partly due to this, traders have been reluctant to push crude oil higher despite the fact that the fundamentals of crude oil have been improving.
"The trade remained very technical, and no one was willing to buy on fundamental news alone, instead keeping an eye on the currency market," said Andrey Kryuchenkov, vice president of commodities research of VTB Capital.
The front-month April light, sweet crude contract on the New York Mercantile Exchange was trading $0.63 lower at $81.57 a barrel. T he front-month May Brent contract on London's ICE futures exchange was down $0.71 at $80.77 a barrel.
On the fundamental front, there are some uncertainties. Although global oil demand has been improving since early last year, higher oil prices may cripple the fragile recovery, analysts said.
"There has been some improvement in oil demand during 2009, but we need to always keep in mind that this improvement has been done in an environment of oil prices below $75 a barrel, if not below $70 a barrel," said Olivier Jakob, managing director of Swiss consultancy Petromatrix. "We continue to find it premature and adventurous to assume that crude above $85 a barrel with a strong dollar would have a negligible impact on the sustainability of the oil demand recovery," he said.
Elsewhere, the ICE's gasoil contract for April delivery was down $2.50 at $671.25 a metric ton, while Nymex gasoline for April delivery was down 1.54 cents at $2.2855 a gallon.
