Oil prices lost early gains Monday to retreat below $80 a barrel, as the effects of a rising dollar offset the strength in other commodities markets, such as copper, and increases in equities.
By early afternoon in Europe, benchmark crude for April delivery was up 14 cents to $79.80 a barrel in electronic trading on the New York Mercantile Exchange. Earlier in the session, prices peaked at $80.62. On Friday, the contract added $1.49 to settle at $79.66.
Oil traders, who often look to equities as a measure of overall investor sentiment, were cheered by a jump in all the major Asian and European stock indexes Monday.
Equity markets were boosted by hopes that Greece’s debt-ridden economy would soon be rescued and a slowdown in Chinese manufacturing growth, which eased fears of more government measures to cool the economy.
Oil prices were also supported by rising copper prices in the wake of a massive earthquake in Chile, the world’s top copper producer.
Crude prices were “benefiting from spillover buying emanating from copper, where prices are surging in the aftermath” of the earthquake, said Edward Meir, senior commodity analyst at MF Global in New York.
Weighing on oil prices was a stronger dollar, which makes crude more expensive for international investors.
Midday Monday, the euro was down to $1.3533 from $1.3620 late Friday in New York, while the British pound fell sharply to $1.4888 from $1.5248.
This week, investors will be eyeing U.S. jobs data to get a better sense of the recovery in the world’s largest economy. The Labor Department is scheduled to announce February’s unemployment rate on Friday. Joblessness was 9.7 percent in January.
Oil prices have touched the low $80 level several times in the last six months, but fallen back into the $70s when U.S. crude inventory data failed to justify investor optimism.
In other Nymex trading in April contracts, heating oil rose 1.02 cents to $2.0455 a gallon, and gasoline gained 0.61 cent to $2.1940 a gallon. Natural gas prices fell 4.1 cents to $4.772 per 1,000 cubic feet.
In London, Brent crude was up 12 cents at $77.71 on the ICE futures exchange.