By Kristene Quan, MarketWatch
HONG KONG (MarketWatch) — U.S. oil futures extended their decline in electronic trading Monday as the dollar appreciated and as Asian stock markets fell after a mixed finish on Wall Street Friday.
Light, sweet crude for November delivery CLX2 -1.67% fell 48 cents, 0.53%, to $89.40 a barrel on Globex.
The drop came after oil futures on Friday settled at their lowest in a week, shedding $1.83 per barrel, or 2%, on the New York Mercantile Exchange. The decline followed a better-than-expected U.S. employment report for September, with the jobless rate dropping to 7.8%, its lowest level since January 2009.
Although the improvement in the jobs data fueled some doubts about how long the U.S. Federal Reserve will maintain its quantitative easing, some analysts said the Fed’s policy was likely to remain accommodative.
The jobs data “still suggests an overall economy that is flying just moderately above stall speed,” said Timothy Evans, an analyst at Citi Futures, adding that the data
“[The data] doesn’t give any sense of accelerating growth. Without that acceleration, we don’t see a risk that the Fed would curtail its $40 billion per month quantitative easing program or any comparable policy shift,” he added.
The ICE dollar index DXY +0.30% , which measures the greenback against a basket of six major global currencies, rose to 79.489 from 79.350 in North America on Friday. A stronger dollar tends to weigh on prices of commodities such as oil as it makes them less expensive to holders of other currencies.
Meanwhile, Asian markets also declined as resource sector shares fell on doubts about the duration of U.S. monetary easing after Friday’s jobs report. Read Asia Markets.
Among other energy products, heating-oil for November delivery HOX2 -0.88% fell 0.3% to $3.15 a gallon, and gasoline for delivery in the same month RBX2 -0.54% rose fractionally to $2.95 a gallon.
Natural-gas futures for November delivery NGX12 +0.21% were up 0.4% at $3.41 per million British thermal units.
Kristene Quan is a MarketWatch reporter, based in Hong Kong.
