Oil falls as dollar strengthens on strong U.S. GDP data

10:10, January 30, 2010      

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Oil prices fell on Friday as the dollar strengthened against major currencies on unexpectedly strong U.S. GDP data.

Light, sweet crude for March delivery fell 75 cents to settle at 72.89 U.S. dollars a barrel on the New York Mercantile Exchange.

In London, Brent crude for March delivery fell 67 cents to 71. 46 dollars a barrel on the ICE Futures Exchange.

Real GDP jumped by an annual rate of 5.7 percent in the fourth quarter of 2009, the U.S. Commerce Department reported. The stronger-than-expected growth is the biggest since 2003.

The report raised speculations that the U.S. Federal Reserve would lift interest rates earlier than other industrial countries, boosting the dollar. A strong greenback usually limits the appeal of commodities including crude futures as an alternative investment.

Concerns about falling energy consumption also hurt oil prices. U.S. demand for petroleum products has dropped for four straight weeks, according to an Energy Information Administration report.

Economists expect that the U.S. economic growth rate will cool later this year as companies finish restocking inventories and government stimulus efforts fade. This will dampen oil demand.

Source:Xinhua
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