Oil Falls a Third Day

Crude oil fell for a third day in New York on concern the slowing U.S. economy will cut consumption and the dollar's gain will reduce demand for commodities as a hedge against inflation.
TradingEconomics.com, Bloomberg 3/24/2008 6:28:03 AM

Oil dropped as much as 1.8 percent to $100.02 a barrel after losing 7.6 percent last week. U.S. crude prices are likely to fall toward $90 this spring as the country's slowing economic growth encourages traders to exit commodity markets, Goldman Sachs Group Inc. said in a report on March 20.

Crude oil for May delivery traded at $100.67 a barrel at 10:10 a.m. London time. Futures are still up 60 percent in the past year.

The dollar climbed as high as $1.5342 a euro from $1.5431 in New York on March 21, when it posted its first weekly advance against the euro in more than a month.

The threat of recession and a credit freeze caused the U.S. Federal Reserve to cut its main lending rate by three-quarters of a percentage point on March 18.

Crude oil may extend declines after dropping last week for the first time in almost two months, Andy Lipow, president of Houston-based Lipow Oil Associates LLC, said in a Bloomberg interview today.

U.S. consumer spending rose 0.1 percent last month, the smallest gain in more than a year, according to the median estimate of economists surveyed by Bloomberg News before a Commerce Department report due March 28.

Combined sales of new and existing homes dropped to the lowest level in at least nine years, government and private figures may also show. The biggest job losses in five years and record fuel costs are eroding consumer confidence and spending.

Crude oil prices may fall this week as the dollar rebounds and the slowing U.S. economy curbs consumption of fuels.