Oil sinks on consumer confidence drop

07:20, February 24, 2010      

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Oil prices fell back below 79 U.S. dollars a barrel on Tuesday after a more-than-expected drop in U.S. consumer confidence weighed on the market.

The private research group Conference Board said on Tuesday that its consumer confidence index declined from 56.5 in January to 46.0 in February on worries about jobs, while the consensus expected a much more modest drop to 55.0.

The surprising drop in consumer confidence exacerbated investors' concerns about recovery in consumer spending, which is key to energy consumption.

Meanwhile, the dollar strengthened against a basket of currencies on Tuesday, also pressuring on oil prices. Usually a rising greenback limits crude futures' appeal as an alternative investments.

Light, sweet crude for April delivery lost 1.45 cents to settle at 78.86 dollars a barrel on the New York Mercantile Exchange.

In London, Brent crude for April settlement fell 1.35 dollars to 77.26 dollars a barrel on the ICE Futures Exchange.

Source: Xinhua
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