Oil Prices Tumble as Dollar Makes Gains

As of 8:57 am EDT, the price of crude had dropped by 2.0 percent to reach $79.09 a barrel and the price of heating oil had fallen by 1.7 percent.

HEAT USA Price Report

Today’s average retail heating oil price per gallon: Down $0.04
Morning projection (for Tuesday’s average price per gallon): Down $0.04

The value of the US dollar rose toward a three-week high as Greece’s financial troubles continued to weaken the euro. As the dollar gains against the euro, crude oil and heating oil futures become more expensive for traders who hold other currencies, which lowers demand and brings down oil prices. Global oil supplies remain steady, which has helped to cap oil prices even as oil demand is expected to increase this spring and summer. Some analysts pointed to India’s interest rate hike as a sign that global economic recovery will slow, and that would in turn slow down growth in global oil demand.

HEAT USA price experts report that the euro will likely remain weak at least until EU leaders meet this Thursday. A weak euro means that the dollar will be strong, and that will pressure oil prices to drop further.