RTTNews - Crude oil dropped on Monday as its hedge appeal was hurt by a stronger dollar. Traders also continued to collect profits from last week's rally to a seven-month high.
Light sweet crude oil fell to $70.62, down $1.42 for the session. Earlier, oil hit as low as $69.58.
The dollar gained on comments from Russian Finance Minister Alexei Kudrin, who said over the weekend outside the Group of 8 finance ministers meeting that the dollar's role as the main reserve currency was unlikely to change in the near future.
Against the euro, the buck reached a 3 1/2 week high of 1.3754. The dollar also saw moderate strength against the British pound.
On the economic front, the New York Federal Reserve said its general business conditions index fell to a negative 9.4 in June from a negative 4.55 in May, with a negative reading indicating a deterioration in conditions. Economists had expected the index to edge down to a negative 5.10.
Oil extended its losses from Friday when it lost 64 cents a barrel. The Organization of Petroleum Exporting Countries said Friday it expects oil demand to fall to 83.84 million barrels per day in the first quarter, a drop of 1.9% from a year ago. Last month, demand was expected at 84.47 million barrels a day. Despite Friday's drop, oil finished up $1.64 on the week.
Traders looked ahead to the Energy Information Administration's weekly inventory report. EIA data released last week showed U.S. commercial crude oil inventories decreased by 4.4 million barrels in the week ended June 5.
AAA data showed gasoline prices averaged $2.669 per regular unleaded gallon, across the U.S. This is above last month's mark of $2.301 but well-below the $4.077 from a year ago.
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