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Crude oil futures turn lower as U.S. dollar recovers

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Investing.com - Crude oil futures turned lower during U.S. morning hours on Monday, as the dollar index recovered from early losses and entered positive territory amid caution ahead of a speech by Federal Reserve Chairman Ben Bernanke.

On the New York Mercantile Exchange, light sweet crude futures for delivery in March traded at USD93.41 a barrel during U.S. morning trade, down 0.3% on the day.

New York-traded oil prices rose by as much as 0.6% earlier in the day to hit a session high of USD94.26 a barrel. Oil futures touched USD94.67 a barrel on January 10, the strongest level since September 19.

Tuesday's turnaround coincided with the euro trimming its gains against the U.S. dollar as investors turned jittery ahead of a speech by Fed Chief Ben Bernanke later in the trading day.

It will be his first public appearance since the minutes of the Federal Open Market Committee meeting were released earlier this month, which raised speculation the central bank will end its quantitative easing program earlier-than-expected.

The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.1% to trade at 79.69, erasing an earlier loss of as much as 0.25%.

Dollar-denominated oil futures contracts tend to fall when the dollar strengthens, as this makes oil more expensive for buyers in other currencies.

Oil traders were also focusing on China's economic outlook. Government data last week showed that China's trade surplus widened unexpectedly in December, adding to signs of recovery in the world's second largest economy.

Chinese exports grew 14.1% from a year earlier in December, blowing past expectations for a 5% gain and up from a 2.9% increase in November.

Imports expanded by 6% from a year earlier, beating expectations for a 3.5% increase and following on from zero growth the previous month.

Market players were now looking ahead to a report on fourth quarter gross domestic product to be released on Friday, along with data on industrial production and retail sales.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for February delivery rose 0.3% to trade at USD110.95 a barrel, with the spread between the Brent and crude contracts standing at USD17.54 a barrel, the lowest since September.

The spread between the two contracts narrowed to a four-month low following the restart of the Seaway pipeline on Friday, which was shut since January 2 to complete a major expansion.

The expanded line will help alleviate a glut of crude in the Midwest.

The flow to the Gulf from Cushing, Oklahoma, the delivery point for the NYMEX oil futures contract, grew to 400,000 barrels a day from the previous 150,000 barrels a day.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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