March 27 (Bloomberg) -- Crude oil in New York fell the most in two weeks as the dollar’s gain against the euro reduced the appeal of commodities to investors and stock markets declined.
Oil dropped 3.6 percent after the U.S. currency rebounded against the euro on evidence the recession is deepening in Europe. A stronger dollar makes commodities less attractive as an alternative investment. Falling commodity prices and a report showing the U.K. economy contracted more than previously estimated sent stocks lower.
“This correction is long overdue,” said Tom Bentz, a senior energy analyst at BNP Paribas Commodity Futures Inc. in New York. “We were up pretty much all week on the rising stock market and weak dollar. The fundamentals don’t support that kind of a move.”
Crude oil for May delivery fell $1.96 to settle at $52.38 a barrel at 2:51 p.m. on the New York Mercantile Exchange. The contract rose 0.6 percent this week. Prices are up 17 percent this year.
The Reuters/Jefferies CRB Index of 19 commodities fell as much as 5.42 points, or 2.4 percent, to 222.26, the biggest one- day drop since March 2.
The euro, which is used in 16 nations, fell the most against the dollar in more than a month after Europe’s statistics office said industrial orders in the region plunged in January. The currency declined as much as 2 percent to $1.3257, the biggest intraday drop since Feb. 17, and was at $1.3301 at 2:55 p.m. in New York. more...
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