Crude Oil Falls as Dollar Strengthens

Crude oil fell for a second day in New York after the dollar rose against the euro, reducing the appeal of commodities to investors, and a government report yesterday showed U.S. stockpiles increased more than expected., Bloomberg 4/24/2008 7:03:06 AM

The dollar gained versus the euro after an industry report showed German business confidence dropped more than expected in April. Oil supplies rose for the first week in three, gaining 0.8 percent to 316.1 million barrels in the week ended April 18, the Energy Department said.

Crude oil for June delivery fell as much as $1.18, or 1 percent, to $117.12 a barrel in after-hours electronic trading on the New York Mercantile Exchange. The contract traded at $117.46 at 1:31 p.m. in London.

The dollar rose 1.1 percent to $1.5719 against the euro in London, after rising 0.6 percent yesterday. It reached $1.6019 on April 22, the lowest since the euro's 1999 debut. It traded at $1.5767 at 1:26 p.m. in London.

Crude oil contracts have become attractive to investors seeking to offset a 14 percent decline in the dollar against the euro in the past year. When the dollar strengthens, oil loses some of its appeal as an inflation hedge.

In Nigeria, a strike by the white-collar oil workers union began at Exxon Mobil Corp.'s operations in the country after the two sides failed to reach an agreement over compensation, company and union officials said.