Oil set­tles at US$77 as U.S. dol­lar gains

The Guardian (Charlottetown) - - Business -

NEW YORK — Oil prices fell to be­low US$78 a bar­rel Fri­day on a stronger U.S. dol­lar and wor­ries that a drop in con­sumer spending might make the U.S. eco­nomic re­cov­ery un­sus­tain­able.

Bench­mark crude for De­cem­ber de­liv­ery fell $2.87 to set­tle at $77 a bar­rel on the New York Mer­can­tile Ex­change. The con­tract rose $2.41 to set­tle at $79.87 on Thurs­day and has traded near $80 a bar­rel all week.

Oil has been mov­ing higher re­cently on signs that the U.S. econ­omy is im­prov­ing and on a weaker U.S. dol­lar. The Com­merce Depart­ment said Thurs­day that the U.S. econ­omy grew at a 3.5 per cent an­nual pace in the third quar­ter, the best show­ing in two years and break­ing four straight quar­ters of de­clines.

Since oil is largely bought and sold in U.S. dol­lars, in­vestors hold­ing stronger cur­ren­cies can buy more crude for less.

But the U.S. dol­lar rose on Fri­day, and crude fell sharply, mostly on a dour con­sumer spending re­port.

The Com­merce Depart­ment said U.S. con­sumer spending plunged in Septem­ber by the largest amount in nine months. And ev­i­dence that U.S. con­sumers are still hold­ing off on spending drove stocks sharply lower, tem­per­ing en­thu­si­asm from the day be­fore over the econ­omy’s growth in the third quar­ter.

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