Oil slides further on dollar
NEW YORK (Reuters) - Oil prices dropped sharply on Monday, extending a slide from last week's record to 10 percent amid a recovery in the U.S. dollar and lingering worries over slowing energy demand.
Dealers said Monday's losses were tempered somewhat by better than expected U.S. homes sales data that lifted Wall Street stocks and forecasts of unusually cold weather in the U.S. Northeast and European heating markets.
U.S. crude futures settled down 98 cents at $100.86 after touching a low of $99.95, bringing them further below last Monday's $111.80 peak. London Brent crude fell 52 cents to $99.86 a barrel.
Traders and analysts said a recovery in the U.S. dollar from recent lows against the euro was pressuring the nominal price of virtually all dollar-denominated commodities, including crude.
Meanwhile, dealers continued to watch for signs the U.S. economic slowdown was softening energy demand after government data last week showed total petroleum consumption was running about 3.2 percent below last year.
"We suspect that the correction in commodities still has some ways to go, and we could push somewhat lower from here," Edward Meir with MF Global said in a research note.
The weakness in oil was tempered by a recovery in U.S. stock markets, however, after a report showed U.S. February existing home sales rose by more than expected.
U.S. stocks also got a boost from news that JPMorgan Chase & Co had quintupled its offer to buy Bear Stearns Cos, which was hit by the subprime mortgage loan crisis.
Adding support, demand for heating oil in the U.S. will be 3.5 percent above normal this week, according to the National Weather Service. Sub-zero temperatures have also hit northwest Europe.
Support also came from data showing China, the world's second largest oil consumer, raised crude purchases by 18.1 percent over a year earlier to match a daily record made in April 2007 at 3.6 million barrels a day.
(Additional reporting by Fayen Wong in Sydney and Ikuko Kao in London; Editing by Christian Wiessner)
