Oil in Flux as Dollar Strengthens - TheStreet

Crude oil prices look weak early Tuesday at the New York Mercantile Exchange on a stronger dollar, falling oil demand in China and a possible resolution to Russia's military engagement with Georgia.

Overnight West Texas crude futures fell $1.85 to $112.60 a barrel, but have since recouped most of their losses and were recently selling at $114.35 a barrel. Reformulated gasoline is unchanged at $2.86 a gallon, heating oil is also even at $3.14 a gallon, and near-term natural gas is edging up 9 cents at $8.44 per million British thermal units.

The overnight performance of the U.S. dollar was mixed, falling slightly against the euro and yen while making a small gain against the British pound. However, the dollar is trending markedly upward, having advanced strongly against all three currencies over the past seven days of trading.

Russian President Dmitri Medvedev appeared on Russian state television early Tuesday morning, saying that Russia's military strike against Georgia has been put on hold but could resume immediately if Georgia does not adhere to specified demands.

Medvedev did not say when he will remove Russian troops from Georgian soil. He demanded that Georgian troops first withdraw from their defensive positions and that it sign a "binding agreement on non-use of force."

While Medvedev's foreign minister mentioned at a separate briefing that he thought the relationship between the two countries would likely improve if Georgian President Mikheil Saakashvili were to step down, Russia's president did not mention the issue during his televised speech.

Energy stocks are mostly moving higher in early Tuesday trading.

BP

(BP) - Get Report

is gaining 1.2% at $60.94 and is leading the integrated oil pack.

ConocoPhillips

(COP) - Get Report

is edging 0.8% upward at $80.87,

Chevron

(CVX) - Get Report

is adding 0.7% at $84.70, and

Exxon Mobil

(XOM) - Get Report

was recently down fractionally at $77.95.

The

U.S. Oil Fund

(USO) - Get Report

, an exchange-traded fund that closely tracks the performance of WTI crude oil futures contracts at the Nymex, was recently adding 0.4% at $92.92.

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