NEW YORK (AP) - The oil market fluctuated Monday, searching for direction
without much in the way of solid news to drive the market higher or lower.
Retail gas prices, meanwhile, fell further from recent records, while diesel
prices dipped slightly.
Oil futures traded in a narrow range as a tug of war took place between
speculators who have sold as the dollar gained strength, and investors who
bought on a view that the economy -- and demand for oil and gasoline -- may not
be as weak as initially thought.
Many investors view commodities such as oil as a hedge against inflation and
a falling dollar. Also, a weaker dollar makes oil less expensive to overseas
investors. Many analysts believe the greenback's decline was the primary reason
oil surged to a record near $112 a barrel earlier last week. But the effect
tends to reverse when the dollar strengthens, as it did Monday.
Other investors remain more focused on the oil market's underlying supply
and demand fundamentals. These investors bought Monday, following the stock
market higher on reports that JPMorgan Chase & Co. may boost its offer for Bear
Stearns Cos. to $10 a share from $2, and a report that existing home sales rose
unexpectedly last month. Energy investors often view stocks as a proxy of the
economy's health.
Light, sweet crude for May delivery fell 19 cents to $101.65 a barrel on the
New York Mercantile Exchange. But trading was indecisive. Prices moved into
positive territory at times, and fell more than $1 at others.
Last week, oil prices dipped in part on concerns that Bear Stearns'
near-collapse was a sign of significant economic problems. But there are still
investors willing to bet that the strong global economy will boost demand for
oil, and will push prices higher.
"There's still sort of a persistent bullish undertone to this market," said
Brad Samples, an analyst with Summit Energy Services Inc., in Louisville, Ky.
"The market right now doesn't believe that a slowdown in the U.S. is enough," to
end oil's price rally.
Trading volumes were lower than normal Monday due to a holiday in Europe,
which means price moves could be exaggerated, analysts said
At the pump, meanwhile, gas prices slipped 0.4 cent overnight to a national
average of $3.26 a gallon, according to AAA and the Oil Price Information
Service. And, for a change, diesel prices also slipped 0.7 cent from their most
recent record to a national average of $4.029 a gallon.
Gasoline and diesel prices followed oil's surge to a series of records in
recent weeks. But that march higher has halted, at least temporarily, as oil's
rally has stalled.
Falling oil, gasoline and diesel prices would be welcome relief for
consumers, who are also paying higher prices for food and feeling the pinch of
falling home values. Diesel, used to transport the vast majority of the nation's
goods, is a large part of the reason food prices are rising.
Other energy futures were mixed Monday. April gasoline futures rose 3.49
cents to $2.64 a gallon on the Nymex, and April heating oil futures rose 2.16
cents to $2.9988 a gallon.
April natural gas futures rose 21 cents to $9.275 per 1,000 cubic feet.
In London, May Brent crude rose 25 cents to $100.63 barrel on the ICE
Futures exchange.
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