Light oil prices fell under $70 a barrel in early trading on Monday to $69.82, the lowest price since February as the US dollar gained against the euro, which is now at a four year low against the dollar.
The euro fell to $1.2275 on Monday from $1.2352 on Friday. “It’s a sea of red out there,” said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore. “The euro concerns have really impacted confidence among investors across markets. Oil will be under pressure as long as the dollar is surging.”
More falls are likely for the euro this week as investors remain jittery over solvency problems, dealers said. Greece has to repay a portion of its government debt later this week, a reminder that other fiscally troubled euro-zone members may also struggle to meet payments on their own debt.
“It’s not just the problem of Greece’s debt burdening the euro, but also the lingering fears of wider contagion,” said Hideaki Inoue, chief manager of forex and financial products trading at Mitsubishi Trust and Banking Corporation.
The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies including the euro, rose to 87.063, its highest level since March 18, 2009. That was up from 86.201 late Friday in New York.