By Virginia Harrison, MarketWatch
SYDNEY(MarketWatch) — Crude oil futures lost further ground in electronic trading Monday, as a stronger dollar and worries about the strength of the U.S. recovery dampened oil’s investment appeal.
Benchmark crude oil for August delivery CL1Q -1.39% lost 0.8%, or 79 cents, to $95.43 a barrel on the New York Mercantile Exchange during Asian trading hours.
Oil prices shed 2.5% during the North American session on Friday, after disappointingly slow U.S. jobs growth sparked fears of a more prolonged economic slowdown, which would diminish demand for energy.
Analysts at Capital Economics said the weak jobs report “should go some way towards dashing the renewed optimism about the U.S. economy which ... had propped up commodity prices earlier this month.”
“With plenty of signs that other economies are struggling too, underlying demand for commodities [excluding precious metals] will continue to disappoint for some time yet,” the analysts said.
“For now, the downside for prices might only be limited by fresh dollar weakness and renewed talk of QE3,” they said.
The dollar strengthened against the euro on Monday, ahead of an emergency euro-zone meeting due later in the day, reportedly aimed at preventing the Greek sovereign-debt contagion from spreading to Italy. Read more on the emergency euro-zone meeting.
The dollar index DXY +0.70% , which measures the U.S. unit’s value against a basket of six rival currencies, traded at 75.442, up from 75.179 late Friday. Read more about currencies.
The greenback tends to trade inversely to the dollar-priced commodities such as crude oil.
Virginia Harrison is a MarketWatch reporter based in Sydney.
