MW: Oil futures fall as Greek hesitations sink euro, lift dollar
Natural gas slumps 4% as supplies drop far less than expected
By Polya Lesova & Nick Godt, MarketWatch
NEW YORK (MarketWatch) -- Oil futures slumped on Thursday, hit by rising U.S. crude inventories and hesitations over European plans to help Greece, which revived economic concerns, pressured the euro and lifted the dollar.
Crude oil for April delivery fell 54 cents, or 0.7%, to $82.38 a barrel in electronic trading on Globex.
Oil stayed lower even after U.S. reports showed jobless claims fell in the latest week and consumer prices were unchanged in February.
Crude-oil futures "are running ahead of fundamentals and remain disconnected from the physical market," Mike Fitzpatrick, vice president of energy trading at MF Global, said in a note. "The longing for real value can be the only rational explanation for rising oil prices."
Hitting markets in European trade was a report that Greece could seek help from the International Monetary Fund if the European Union is unwilling to provide aid.
"Consequently, the euro and pound are under pressure to the dollar's benefit which is weighing on oil prices," Fitzpatrick said.
The dollar index (DXY 80.08, +0.44, +0.55%) , which measures the U.S. unit against a trade-weighted basket of six major currencies, rose to 80.04 from 79.73 late Wednesday.
Oil prices rose 0.7% on Wednesday, as the Organization of Petroleum Exporting Countries decided to keep its production quota unchanged, as expected.
Members of the cartel also reiterated commitments to their individually agreed production allocations, even though they have repeatedly broken such pledges.
The cartel's current daily quota is 24.845 million barrels, but January compliance with that target was at 54.4%, according to a Platts survey.
The U.S. Energy Information Administration reported Wednesday that crude inventories rose by 1 million barrels in the week ended March 12, while gasoline and distillate inventories declined.
Natural gas slumps
"Gas prices continue to drop as the weather stays spring-like and supplies ample," according to MF Global.
Natural-gas futures fell 4% after the EIA said U.S. supplies of natural gas in storage fell by 11 billion cubic feet, much less than expected.
Analysts polled by Platts expected a drop of between 27 to 31 billion cubic feet.
Natural gas for April delivery was down 17 cents, or 4%, at $4.13 per million British thermal units. It earlier traded as high as $4.33 per million Btus.
