HONG KONG (MarketWatch) — Nymex crude-oil futures dropped after struggling to rise in choppy trading during Asian hours Monday as a retreat in regional stocks and a firm U.S. dollar weighed on sentiment toward the commodity.
The front-month contract of light, sweet crude for delivery in September CL1U +0.78% fell 30 cents, or 0.4%, to $81.96 a barrel on Globex. The contract had risen as high as $83.22 a barrel earlier in the day, but retraced its path as regional markets retreated and the dollar held its ground. Read Asia Markets.
On Friday, September futures slipped a bit to end with a weekly loss of 3.7%, amid raging worries over the European debt crisis and a weakened U.S. economic outlook.
Meanwhile, the dollar index DXY -0.09% , which measures the greenback’s performance against six major global currencies, rose to 74.06 from 74.008 in late North American trade Friday. A strong dollar usually tends to weaken commodities that are priced in the currency, including crude-oil.
Crude’s choppy performance came as images of celebrating Libyan rebels filled television screens, raising the prospect that an end to months of strife in the oil-rich country may be near. The rebels have reportedly neared the center of capital Tripoli, meeting little resistance from forces loyal to Libyan leader Col. Moammar Gadhafi. Read full story.
Investors were also looking forward to Federal Reserve Chairman Ben Bernanke’s speech at Jackson Hole on Friday, amid a debate and speculation over further monetary easing, and specifically, about any reference to the Fed’s third round of quantitative easing, or QE3.
“Expectations are high, but those looking for an outright commitment to QE3 are likely to be disappointed,” said analysts at Societe Generale. “QE3 may well happen eventually, but the Fed will likely use up more conventional and less controversial tools first,” they added.
