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Oil prices plunge on dollar rise

16 June 2009 08:11 (UTC +04:00)

Bakuâ€“ APA-Economics. Oil fell for a third day as the dollar rose the most against the euro since April, limiting investorsâ€™ need to use commodities as an inflation hedge, Bloomberg reports.

Crude declined as the U.S. currency yesterday rose to its strongest against the euro since May 21 after Russian Finance Minister Alexei Kudrin said the nation has full confidence in the dollar. Oil also weakened as a report showed manufacturing in the New York region contracted for a 14th month and equities retreated in the U.S., Europe and Asia.

Crude oil for July delivery fell 23 cents, or 0.3 percent, to $70.39 a barrel at 8:01 a.m. Sydney time on the New York Mercantile Exchange. Yesterday, it dropped $1.42, or 2 percent, to settle at $70.62 a barrel. Oil reached $73.23 on June 11, the highest in seven months.

Brent crude for August delivery lost $1.56, or 2.2 percent, yesterday to $70.24 a barrel on Londonâ€™s ICE Futures Europe exchange. The July contract expired yesterday at $69.44 a barrel.