Crude oil fell below $33 a barrel in New York as the strengthening dollar reduced the appeal of commodity investments at a time when demand is declining and stockpiles are rising.
At Cushing, Oklahoma, where the benchmark for New York futures is stored, inventories have climbed to 33 million barrels, the highest since records started four years ago. The February contract will cease trading today, so traders have to sell futures or accept the barrels at a time of falling demand.
“Traders are rolling over to the next month to avoid delivery and the dollar is rallying,” said Andrey Kryuchenkov, an analyst with VTB Capital in London. “All this against a background of falling demand and easing geopolitical tensions.”
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Crude oil for February delivery fell to $32.70, down 10.4 percent from last week’s close and the lowest since Dec. 19, on the New York Mercantile Exchange today. The contract traded at $33.37 a barrel at 10:45 a.m. London time.
Floor trading was closed for the Martin Luther King Jr. holiday yesterday. Trades then will be booked today for settlement. The more-actively traded March contract was at $39.59, down 7 percent.