Oil prices fell toward $77 a barrel today as the dollar strengthened and Wall Street slipped on worries about domestic bank results and bank lending curbs in China, according to Reuters. The U.S. crude contract for February delivery, which expires on Wednesday, fell $1.87 to $77.15 a barrel by 1:46 p.m. EST (1846 GMT). March crude fell $1.78 to $77.54. In London, Brent crude for March delivery fell $1.57 to $76.06 a barrel. U.S. equities suffered their worst slide of 2010 on Wednesday as investors worried that bank lending restrictions in China could hurt the global economic recovery. New U.S. housing starts unexpectedly fell in December, while U.S. producer prices rose 0.2 percent last month. Investors have looked to wider economic data over the past year for signs of economic recovery and a potential rebound in energy demand. "The petroleum markets continue to take much of their guidance from the financial markets, with both the retreat in the equity markets and the firmer U.S. dollar prompting short-term traders to sell petroleum," said Tim Evans, energy analyst at Citi Futures Perspective in New York. Book squaring on front-month February crude ahead of expiry was contributing to the day's volatility, Evans added. The euro fell to fresh five month lows against the dollar on Wednesday as markets worried about Greece's public finances. Over the past year, oil prices have frequently weakened as the dollar firmed, at times signaling a flight to safer havens by investors. "We're starting to see the commodity trade come off, mostly on the stronger dollar," said market analyst Michael Hewson at CMC Markets in London.
