Oil fell from the highest close in four months as a stronger dollar reduced the appeal of commodities to investors. Oil dropped as much as 3.4 percent after the U.S. currency rebounded against the euro on evidence the recession is deepening in Europe. A stronger dollar makes commodities less attractive as an alternative investment. The Federal Reserve said this week it will buy more than $1 trillion in government and mortgage debt to help end the recession and credit crisis. “The stronger dollar is bringing all of the commodities down,” said Phil Flynn, a senior trader at Alaron Trading Corp. in Chicago. “The Federal Reserve’s policies have become the major driver of the commodities.” Crude oil for May delivery fell $1.58, or 2.9 percent, to $52.76 a barrel on the New York Mercantile Exchange. Prices are up 18 percent so far this year. The euro, which is used in 16 nations, fell the most against the dollar in more than a month after Europe’s statistics office said industrial orders in the region plunged in January. The common currency fell as much as 1.8 percent to $1.3277, the biggest intraday drop since Feb. 17, before trading at $1.3322 at 9:05 a.m. in New York. Oil futures have jumped 36 percent in the five weeks through March 20. Crude is set for its sixth consecutive week of gains on signs of an economic recovery in the U.S., the world’s biggest oil-consuming country, where new home sales increased last month and durable goods orders rose. Goldman Sachs Group Inc. said oil’s rally is vulnerable to a correction as demand remains constrained. Brent crude oil for May settlement fell $1.41, or 2.6 percent, to $52.05 a barrel on London’s ICE Futures Europe exchange.

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