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Oil prices plunge as appeal of commodities collapse

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

Bakuâ€“ APA-Economics. Crude oil was little changed as U.S. equities dropped and the dollar rebounded, reducing the appeal of commodities as an alternative investment, Bloomberg reported.

Oil retreated from an advance of 3 percent, as the Standard & Poorâ€™s 500 Index and Dow Jones Industrial Average fell and the dollar strengthened from its weakest level against the euro since May 21. U.S. industrial production figures signaled that the manufacturing slump remains broad-based.

Crude oil for July delivery fell 15 cents to settle at $70.47 a barrel at 2:42 p.m. on the New York Mercantile Exchange. Earlier, it rose as high as $72.77. Last week, oil touched a seven-month high of $73.23 a barrel. It has risen 58 percent this year.

Prices dropped in electronic trading after the American Petroleum Institute reported that U.S. crude-oil supplies lost 1.26 million barrels, or 0.4 percent, to 356.6 million barrels, a seventh consecutive weekly decline. Futures were down 25 cents, or 0.4 percent, to $70.37 a barrel at 4:32 p.m.

Earlier, oil increased for the first time in three days as the dollar dropped against most of its major counterparts after leaders of Brazil, Russia, India and China considered reducing their dependence on the currency. Gasoline rose above $2.11 a gallon for the first time since Oct. 7.

Brent crude for August delivery was unchanged from yesterday at $70.24 a barrel on Londonâ€™s ICE Futures Europe exchange.