NEW YORK (
) -- Crude oil futures fell further on Monday, even as the dollar weakened after the
indicated it will keep interest rates low in the near-term.
The January delivery contract for light, sweet crude extended its losses on Monday, losing $1.54, or 2%, to settle at $73.93 a barrel. Crude oil traded as high as $76.10 a barrel earlier in the session.
A stronger greenback pressured commodity prices early in Monday's session but prices failed to recover even as the dollar reversed. The currency buckled following Bernanke's highly anticipated speech to the Economic Club of Washington, during which he expressed his intentions to keep interest rates low until recovery headwinds have subsided. The speech effectively eased market concerns that better-than-expected November jobs data would give regulators a reason to raise interest rates earlier than planned and the dollar suffered as a result. The Dollar Index, a measure of the dollar against a basket of currencies, was last down by 0.08%.
The weaker dollar, however, did little to make oil more appealing to investors since demand has been weak and
Bernanke took a cautious stance on the long-term sustainability of economic improvement.
Although economic indicators have been pointing to gradually improving conditions, oil prices have been weak as investors await indications of a demand turnaround.
"Last week brought little change to recent trading patterns in oil markets, whereby prices remained entrenched in their tightly defined trading range since mid-October," said Barclays Capital analyst Amrita Sen, adding that improved diesel demand would be needed for the next push in oil prices.
"As the global economy continues to recover and translate into higher industrial production and greater trade flows, diesel demand should start to inspire again, which in our view, will be the required catalyst for the next leg up in oil prices."
On Monday, market watchers also digested announcements from administrators at OPEC. Officials from several countries said they expect production targets to remain steady following the group's upcoming policy meeting. Saudi Arabian oil minister Ali al-Naimi also reportedly called current crude prices around $75 a barrel "perfect."
United States Oil Fund
ETF declined by 2.2% to close at $37.47.
Most related equities were moved lower during the session, as the NYSE Arca Oil Index and the Philadelphia Oil Service Sector Index fell nearly 4.4% and 0.01% each.
Shares of major integrated players
were bid higher by 0.3% and 0.1%, respectively. But shares of
slumped 48 cents, or 0.7%, to finish at $73.77.
Elsewhere on the Nymex, natural gas for January delivery tracked higher by 37 cents to $4.95 as expectations for colder temperatures and the season's first withdrawal set in. Gasoline for January delivery fell by 4 cents, or 2%, to $1.94 a gallon, as heating oil for January delivery dropped nearly 2 cents to $2.01 a gallon.
-- Written by Sung Moss and Melinda Peer in New York