Stronger dollar pushes oil prices lower

Crude oil prices were lower Monday as the US dollar strengthened after gaining early on a weaker dollar, showing that currency strength and other economic considerations, rather than fundamentals, continues to drive oil price levels, causing some analysts to worry that continuing price increases could hurt economic recovery.

December contracts for West Texas Intermediate crude were down $1.63 to $78.87 per barrel at about 20 minutes before the close of floor trade on the New York Mercantile Exchange, while at last report Brent crude for December delivery was down $1.24 to $77.68 per barrel on the ICE Futures Europe exchange in London.

Even as prices rose earlier, they were held to minor gains by news that the Nigerian government has reached an cease-fire agreement with rebels in the country’s oil-rich Niger Delta region.

Meanwhile, retail prices for a gallon of gasoline in the US were up over half a cent overnight to $2.671 per gallon on average, according to AAA, less than the same time last year but up 20 cents over two weeks ago.

The gains in gasoline prices have some worried that the hikes in gasoline prices could limit holiday spending by consumers.

Nymex November gasoline traded about even during the session at $2.04 per gallon while December heating oil was up 3 cents to $2.13 per gallon but December natural gas futures were down 25 cents to $5.23 per million British thermal units.