Oil Trades Below $74 on Recovery Skepticism, Stronger Dollar

Jan. 29 (Bloomberg) -- Crude oil traded below $74 a barrel on concern the pace of recovery in the U.S., the biggest energy consumer, is slowing and as the dollar rose amid speculation Greece won’t be able to finance its budget deficit.

Oil is poised for a third weekly decline after U.S. equities dropped to the lowest level in 11 weeks, eroding confidence that economic growth will rebound. The dollar strengthened against the euro, limiting investor demand for commodities.

“The optimism that led into 2010 has dried up very quickly,” said Jonathan Barratt, managing director at Commodity Broking Services Pty in Sydney. “Economies have been running off stimulus packages, not off genuine demand.”

Crude oil for March delivery traded at $73.70 a barrel, up 6 cents, in electronic trading on the New York Mercantile Exchange at 9:02 a.m. Singapore time. Yesterday, the contract fell 3 cents to $73.64. Prices are poised for a 1.1 percent decline for the week.

The S&P 500 dropped 1.2 percent yesterday to 1,084.53, the lowest close since Nov. 6. The Dow Jones Industrial Average declined 1.1 percent to 10,120.46.

The dollar traded at $1.3943 per euro at 11:31 a.m. Sydney time, from $1.3971 yesterday. The 16-nation euro fell yesterday against most of its major counterparts as the cost to insure Greece’s sovereign debt rose to a record.

The Organization of Petroleum Exporting Countries will increase oil shipments by 1.5 percent in the four weeks ending Feb. 13 on continuing demand from Asia, according to tanker- tracker Oil Movements.

OPEC, which supplies about 40 percent of the world’s crude, will ship 23.21 million barrels a day in the month ending Feb. 13, compared with 22.87 million a day in the four weeks to Jan. 16, the Halifax, England-based consultant said yesterday.

Brent crude oil for March settlement fell 11 cents, or 0.2 percent, to $72.13 a barrel on the London-based ICE Futures Europe exchange yesterday.