By V. Phani Kumar, MarketWatch
LONDON (MarketWatch) — Crude-oil futures extended losses during European trading hours Friday as the U.S. dollar strengthened.
Light, sweet crude for April delivery CLJ2 -0.77% fell 80 cents, or 0.7%, to $108.02 a barrel in electronic trading, after rising $1.77 in the regular New York Mercantile Exchange session Thursday.
The contract had briefly climbed above $110 a barrel on reports — subsequently denied — of a Saudi pipeline explosion. Read more on Saudi denial of pipeline-blast reports.
Friday’s crude weakness came as the U.S. dollar DXY +0.69% rose 0.4% against major rivals, pressuring prices of commodities that are benchmarked in the currency.
But despite the drop, crude prices have risen about 9.8% so far in 2012.
“The recent rally in oil prices will increase inflationary pressures around the world, making central banks less apt to loosen monetary policy even though higher prices hurt growth,” said Kathy Lien, director at Global Research & Analysis.
“This will pose a threat to growth in countries around the world, and those that are actively implementing austerity measures will probably feel the most pain,” she said.
Nomura analysts, meanwhile, said higher crude would be negative for many Asian currencies, given the resulting global economic drag and the Asia-Pacific region’s dependence on energy exports. Read more on Nomura comments on Asia and oil prices.
Among other energy products, April gasoline futures RBJ2 -1.27% fell 1.2% to $3.31 per gallon, and April heating oil HOJ2 -0.97% dropped 1% to $3.24 per gallon.
April natural-gas futures NGJ12 +0.61% rose 0.8% to $2.48 per million British thermal units.
