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Crude-oil tumbles as dollar rises, equities slide

Published: June 8, 2012 | 7:10 am
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HONG KONG — Crude-oil prices tumbled in electronic trading Friday, with risk-appetite deteriorating before the weekend as investors awaited Chinese economic data due out over the weekend and the U.S. dollar jumped.

Light, sweet crude-oil futures for July delivery CLN2 -2.13% slumped $1.47, or 1.7%, to $83.35 a barrel in electronic trading.

The front-month contract on Thursday ended 20 cents lower on the New York Mercantile Exchange after Federal Reserve Chairman Ben Bernanke didn’t specifically mention any monetary easing plans. Read more on Fed Chairman Bernanke’s testimony before Congress

Fitch Ratings downgraded Spain’s credit ratings by three notches to BBB, also adding to worries about the euro-zone debt crisis.

The lower settlement on Nymex Thursday came despite initial gains for crude futures, after China announced a surprise interest-rate reduction. Ready why the China rate cut is a mixed blessing.

In Asian trading Friday, the timing of the interest rate cut sparked worries about a slate of upcoming data from China this weekend, including inflation, industrial production and retail sales. Read MarketWatch First Take on the rate cut.

The dollar also jumped in Friday’s trade as Asian markets slumped and U.S. equity futures declined. The ICE dollar index DXY +0.39% climbed to 82.4250 from 82.241 in North American trade Friday, pressuring prices of commodities that are priced in the currency. Read Asia Markets.

Meanwhile, Dow Jones Industrial Average DJIA +0.37% futures dropped 66 points, or 0.5%, to 12,340 and S&P 500 Index SPX -0.01% futures gave up 8.20 points, or 0.6%, to 1,301.80.

Crude wasn’t the only product from the energy complex that came under intense selling pressure. The July futures for gasoline RBN2 -1.21% and heating-oil HON2 -0.86% dropped by 1.1% to $2.65 per gallon and by 0.9% to $2.64 per gallon, respectively.

Natural-gas futures for delivery in the same month NGN12 -0.88% lost 0.5% to $2.26 per million British thermal units.

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