By Claudia Assis, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil futures traded lower Friday, pressured by a rising dollar and collapsing stocks and as investors waited for the conclusion of a Group of Seven industrialized nations meeting.
Crude for October delivery CL1V -1.91% retreated $2.16, or 2.4%, to $86.92 a barrel on the New York Mercantile Exchange. Oil has settled in the red for three of the past four sessions.
Losses mounted for oil and most other commodities as U.S. equities took a nosedive following news a German member of the European Central Bank had resigned.
Governing Council member Juergen Stark stepped out because of disagreements over the bank’s bond-buying program, a painful reminder of the divisions still ripping through the 17-nation euro zone.
The steep losses for equities, seen as a proxy for future oil demand, dulled any benefits from President Barack Obama’s job plan unveiled late Thursday.
Obama asked Congress to approve a $440 billion program to create jobs and boost the U.S. economy, using a combination of tax cuts and government spending. Investors had expected a plan of around $300 billion.
Investors “realized that it will require Republican support to pass any new bills, and that might be difficult to achieve heading into a quadrennial election year,” analysts at Cameron Hanover said in a note to clients Friday.
Meanwhile, finance ministers and central bankers of the seven top industrialized nations have gathered in the French port city of Marseilles, and investors hope they will bring forward measures to jump-start the global economy.
The dollar index DXY +0.92% , which measures the U.S. unit against a basket of six major rivals, rose to 76.952, up from 76.284 late Thursday in North American trading.
A stronger dollar is a negative for oil and other commodities as it makes them more expensive for holders of other currencies.
Meanwhile, Tropical Storm Nate drifted northward in the Gulf of Mexico, and it is expected to become the third hurricane of the Atlantic season later Friday.
Some oil companies such as BP PLC BP -1.46% and Apache Corp. APA -1.26% said they are beginning evacuations of non-essential workers from offshore platforms, according to media and analyst reports.
“Although at this point Nate does not appear to threaten major oil-producing areas, it comes just as producers are recovering from [Tropical Storm Lee] last week and is a useful reminder that we not even halfway through the hurricane season yet,” analysts at J. P. Morgan said in a note to clients Friday.
Gasoline for October delivery RB1V -2.89% was off 4 cents, or 1.4%, to $2.85 a gallon.
