Oil falls below $70 as euro sinks to 4-year low
Oil prices dropped below $70 a barrel Monday in Asia as the euro sank to a four-year low and stock markets tumbled on investor concern Europe's economy will wither amid a debt crisis and fiscal austerity measures.
Benchmark crude for June delivery was down $1.64 to $69.97 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The June contract lost $2.79, almost 4 percent, to settle at $71.61 on Friday.
Crude fell as low as $69.82, the lowest since $69.59 on Feb. 5, as the U.S. dollar gained against the beleaguered euro, which was at a four year-low. Oil, which is priced in dollars, becomes more expensive to investors holding other currencies when the dollar advances.
The euro fell to $1.2279 on Monday from $1.2352 on Friday while the dollar slid to 92.03 yen rom 92.30 yen.
Asian stock markets also plunged Monday, and oil investors often look to equities as a sign of overall investor confidence.
"It's a sea of red out there," said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore. "The euro concerns have really impacted confidence among investors across markets."
"Oil will be under pressure as long as the dollar is surging," he said.
In other Nymex trading in June contracts, heating oil fell 3.11 cents to $2.0393 a gallon, and gasoline fell 3.77 cents to $2.0931 a gallon. Natural gas was steady at $4.313 per 1,000 cubic feet.
In London, Brent crude was down $1.08 to $76.85 on the ICE futures exchange.