Big drop for crude

Prices give up recent gains as dollar strengthens and Mid East tension eases

Crude futures on Friday, 02 March 2012 dropped substantially at Nymex after a denial that a pipeline was attacked and as the U.S. dollar strengthened.

Light, sweet crude for April delivery fell $2.14, or 2%, to settle at $106.70 a barrel on the New York Mercantile Exchange. On the week, oil declined 2.8%, snapping a three-week string of gains that included a 6% advance the previous week. Crude prices have risen about 9.8% so far in 2012.



Investors also weighed news President Barack Obama will speak on U.S Israeli relations and Iran's nuclear program in the weekend.

The dollar index, which measures the greenback's performance against a basket of six currencies, rose by 0.6%. The dollar gained against the euro and most major rivals after January data on retail sales in Germany came in weaker than expected.

The euro also got hit over bad news from Spain, which reported an increase in jobless claims in February. In addition, the Spanish government raised its budget deficit target to 5.8% of gross domestic product for 2012, compared with 4.4% in previous forecasts.

Among other energy products, April gasoline futures fell 8 cents, or 2.4%, to end at $3.27 per gallon on Friday. On the week, gasoline lost 1.6%. April heating oil dropped 7 cents, or 2.2%, to finish at $3.20 per gallon. Weekly declines reached 3.4%.

April natural-gas futures bucked the trend, gaining 2 cents, or 0.9%, to settle at $2.48 per million British thermal units. On the week, natural gas lost 7.8%.