By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) — Crude-oil futures slipped in choppy trade Monday, with a strengthened U.S. dollar weighing on the commodity after it rose for three consecutive weeks.
Light, sweet crude-oil futures for delivery in August CLQ3 -0.53% fell 53 cents, or 0.5%, to $105.42 a barrel. Oil prices ended gained about 2.6% last week after Federal Reserve Chairman Ben Bernanke indicated the U.S. central bank was in no hurry to raise interest rates.
Analysts at Commerzbank said that while technical factors still made investments in crude-oil attractive to financial investors, “considerable potential for correction has also built up, if financial investors were to take profits and close their positions.”
The contract had risen as high as $106.38 earlier in the day after the Chinese economy grew 7.5% in the second-quarter, matching expectations, but was unable to hang on to those gains amid worries the economic slowdown may not have run its course.
“In the near term, the downside risk for growth has become much more elevated now than a few months ago. Uncertainties remain huge with domestic construction-sector and external demand, and we expect China’s growth could slip even further to below 7.5% in the second half” of 2013, said Ren Xianfang, a senior economist at IHS Global Insight.
The ICE dollar index DXY +0.35% , which measures the greenback’s performance against a basket of six major global rivals, rose to 83.076 by late afternoon in Hong Kong, after trading under the 83-point level for earlier in the day.
Commodity prices tend to drop when the U.S. dollar strengthens, as a stronger greenback makes them more expensive to holders of other currencies.
