Crude oil dropped for a second day as equities retreated and the dollar rebounded from a 14-month low against the euro.
Oil fell as much as 1.7 per cent as US stocks declined on disappointing results at the nation’s largest railroad. The US currency strengthened, curbing the appeal of commodities as an inflation hedge. UK gross domestic product unexpectedly dropped in the third quarter, a report showed today.
"The dollar is somewhat stronger and the S&P is down, both of which are sending oil lower," said Tim Evans, an energy analyst with Citi Futures Perspective in New York. "There’s also some fundamental news behind this move. The UK’s GDP numbers today were disappointing and suggest that the British economy is still in a recession."
Crude for December delivery fell 76 US cents, or 0.9 per cent, to $US80.43 a barrel at the close of floor trading on the New York Mercantile Exchange. Futures are up 80 per cent this year and touched a one-year high of $US82 a barrel on October 21.
Industrial shares in the Standard & Poor’s 500 Index dropped, led by railroad stocks, after Burlington Northern Santa Fe Corp forecast fourth-quarter profit that trailed analysts’ estimates. The S&P 500 slipped 1.2 per cent to 1079.36, and the Dow Jones Industrial Average decreased 1.1 per cent to 9966.96.
The dollar rose 0.2 per cent
to $US1.5011 per euro from $US1.5033 yesterday. It traded as low as $US1.506 earlier
today, the weakest since August 2008.
