NEW YORK (
) -- Oil moved higher Monday, but couldn't regain some of the strength it lost last week as it settled below $72 a barrel.
The most actively traded March delivery crude contract settled 70 cents, or 1% higher, at $71.89 a barrel. The contract went as high as $72.39 a barrel and as low as $70.77 during the session.
A weaker greenback was helping lift the contract, as the dollar index fell 0.2%.
The dollar index reached its highest level in eight months Friday as investors continued internalizing the effects from increasing deficits in Portugal, Greece and Spain. Investors ran away from risky assets on concerns about the global economic recovery.
Phil Flynn, energy analyst at Alaron Trading, said oil is getting direction from dollar movements, though separate reports about tensions in Iran and militant attacks in the Niger Delta were probably playing a limited role.
"We had the big move down last week and people are starting to realize that the price of oil is dependent on the strength of the dollar and the strength of the stock market. And today, after the big movement down, the market is looking for some inspiration to move," said Flynn. "In the short term, we're really just at the whims of the currency market and today that's pretty much what we're moving off of."
Mike Fitzpatrick, energy analyst at MF Global, is less compelled by the immediate dollar moves. Looking ahead, he notes that the contract is awaiting a cue from policymakers while trending at the upper end of a range between $67 and $72.
"As we approach the end of the first quarter, I think, then, market participants are going to want to see how the other exogenesis influences on the market are shaping up and the economic policy going forward. It seems like right now, confusion is fueling pessimism, which was fueling selling," said Fitzpatrick. "I'm looking at it as just a kind of listless market and we're waiting for the next announcement from the policymakers."
U.S. Oil Fund
ETF shed 12 cents, or 0.3%, to close at $35.09, while the
PowerShares DB Oil Fund
ETF lost 4 cents, or 0.2%, to finish at $24.66.
was down by 3 cents, or 0.1%, to $64.35 at the close after the Dow component was upgraded to buy from hold at Collins Stewart.
Among other big gainers,
lost 41 cents, or 0.5%, to $76.30 and French conglomerate
fell by 16 cents, or 0.3%, to end at $55.17.
The NYSE Arca Oil Index dropped 0.8%, as did the Philadelphia Oil Services Index.
Oilfield services company
reports first-quarter earnings on Tuesday. Analysts are expecting a profit of 4 cents a share. The stock closed 14 cents, or 0.7% lower at $20.33.
At 4:30 p.m. EST, the American Petroleum Institute is expected to release weekly inventory data. Analysts polled by Platts anticipate a build of 2 million barrels in crude oil supplies and an increase of 1 million barrels in gasoline stocks. Distillates stockpiles are projected to decline by 1.75 million barrels because analysts expect that the recent cold snap moved more product through the distribution system.
Natural gas futures slipped after getting a lift from cold weather forecasts. The March delivery contract lost 12 cents, or 2.1%, to $5.40 per million British thermal units. The March heating oil contract added a penny, or 0.6%, to settle at $1.89 a gallon, as the March reformulated gasoline contract ticked up marginally, gaining nearly a penny, or 0.4%, to close at $1.89 a gallon.
--Written by Sung Moss and Melinda Peer in New York