World Business

Oil declines to 7-month low

(Agencies)
Updated: 2010-05-19 13:52

Crude oil slumped to a seven-month low in New York as the dollar climbed against the euro, curbing the investment appeal of commodities, and after a US industry report showed an increase in stockpiles of gasoline.

Oil dropped for a seventh day after the 16-nation currency touched a four-year low versus the greenback on concern European nations will struggle to meet austerity requirements. Gasoline inventories rose 981,000 barrels last week, the American Petroleum Institute said yesterday.

"The trend is still down for the price of oil," said Mike Sander, an investment adviser a Sander Capital Advisors in Seattle. "As long as the euro continues to sink like a rock, the price of oil will remain on the defensive. The June contract saw oil break through support at the $70 barrel level and we could see oil hit $67."

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Crude oil for June delivery dropped as much as $1.32, or 1.9 percent, to $68.09 a barrel in electronic trading on the New York Mercantile Exchange, the lowest intraday price since Oct 5. It was at $68.29 at 10:26 am in Sydney. Yesterday, the contract fell 67 cents to $69.41 a barrel, the lowest settlement since Sept 29. Futures rose as much as 3.5 percent to $72.52 yesterday.

The dollar traded at $1.2177 against the euro at 10:26 am Sydney time, after climbing 1.6 percent yesterday. The euro fell after Germany said it will ban naked short-selling and naked credit-default swaps of euro-area sovereign debt and the Bank of Italy allowed lenders to exclude losses on government bonds.