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Crude oil falls below $75

27 January 2010 07:52 (UTC +04:00)

Bakuâ€“ APA-Economics. Crude oil traded below $75 a barrel as the dollar strengthened against the euro, reducing the appeal of commodities as an alternative investment.
Oil dropped 0.7 percent yesterday as the dollar gained against its major counterparts on speculation China will take further steps to cool its economy. A U.S. government report today will probably show oil supplies in the worldâ€™s biggest energy user rose, according to a Bloomberg News survey.
Crude oil for March delivery traded at $74.75 a barrel, up 4 cents, in electronic trading on the New York Mercantile Exchange at 12:59 p.m. Singapore time. Yesterday, the contract dropped 55 cents to settle at $74.71.
Oil stockpiles reported by the Energy Department probably climbed 1.58 million barrels in the week ended Jan. 22 from 330.6 million the prior week, according to the median of 18 analyst estimates in the Bloomberg News survey of analysts.
Refining rates, already at their lowest level outside the Atlantic hurricane season since at least 1989, probably fell 0.1 percentage point. Distillate stockpiles, a category that includes heating oil and diesel, are expected to fall by 1.9 million barrels, the survey said.
If the Energy Department numbers follow the forecasts, that would be counter to American Petroleum Institute data that was released late yesterday. Inventories of crude fell by 2.23 million barrels last week to 326.1 million, the industry group said. Distillate fuel supplies dropped 1.98 million barrels.
The dollar rose against the euro as investors sold the European currency on concern about fiscal deficits in the region. The dollar traded at $1.4077 to the euro at 12:55 p.m. Singapore time, from $1.4072 yesterday.
Crude also dropped on speculation that oil demand may wane in China because of concerns of a slowing economy after banks began restricting new loans in response to a push by regulators to contain credit.
Brent crude for March settlement was at $73.28 a barrel, down 1 cent, on the London-based ICE Futures Europe exchange at 12:59 p.m. Singapore time. The contract declined 40 cents, or 0.5 percent, to $73.29 a barrel yesterday.