Oil prices slipped below $80 a barrel Thursday as a stronger dollar made crude more expensive for international investors and the market received mixed signals on the strength of the U.S. economy, AP reported. By early afternoon in Europe, benchmark crude for April delivery was down 50 cents to $79.50 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.14 to settle at $80 on Wednesday. Investors had cheered comments by Federal Reserve Chairman Ben Bernanke, who told Congress on Wednesday he expects interest rates will remain low for an extended period to help boost an economy emerging from last year's recession. The Dow Jones industrial average rose 0.9 percent. «The stock market appeared to rejuvenate the bullish oil argument that this economic optimism will eventually translate into a significant upswing in OECD demand,» Galena, Illinois-based Ritterbusch and Associates said in a report. «This month's bull run has not necessarily achieved completion.» By Thursday, however, stock markets in Asia and Europe were mostly lower, while the dollar strengthened on continued fears about the indebtedness of some European economies, like Greece and Spain. Analysts were split over how much the dollar and stock markets were affecting oil prices. «The correlation between the Dollar Index and crude oil has been totally broken down this year, with crude oil following the movement on equities much more than on the Dollar,» said Olivier Jakob of Petromatrix in Switzerland. On the other hand, MF Global's Edward Meir said the dollar would continue to be the main factor determining oil prices, predicting the dollar would continue to make gains, keeping pressure on oil and other commodities. The euro was down to $1.3492 on Thursday compared with $1.3528 late Wednesday in New York, while the dollar retreated to 89.36 Japanese yen from 90.15 yen. Some data released Wednesday reflected an economy still struggling to gain solid footing. The Commerce Department said sales of new homes fell to a record low in January, while economists expected an increase. And the Energy Information Administration reported that oil inventories rose by 3 million barrels last week and that supplies are still well above average for this time of year, suggesting crude demand remains weak. In other Nymex trading in March contracts, heating oil fell 0.78 cent to $2.0343 a gallon, and gasoline fell 1.89 cents to $2.0800 a gallon. April natural gas prices were down 5.9 cents to $4.800 per 1,000 cubic feet. In London, Brent crude lost 33 cents to $77.76 on the ICE futures exchange. -- SPA
