Oil prices dropped below $79 a barrel today, as stocks fell for a third day and the dollar gained, according to AP. Benchmark crude lost 81 cents to $79.16 a barrel in midday trading on the New York Mercantile Exchange after falling as low as $78.24. Oil lost $2.77 to settle at $79.97 on Wednesday. Crude has dropped about 10 percent from an 18-month high above $87 a barrel earlier this week. Europe's debt problems have undermined confidence in the euro and strengthened the dollar. Commodities priced in dollars, like oil, become more expensive for investors holding euros as the dollar rises. «The market is realizing the problem in Europe is not easy to fix,» said Clarence Chu, a trader with market maker Hudson Capital Energy. «If the euro collapses, that's really going to push crude down.» Investors sold off stocks again on Thursday. The Dow Jones Industrial Average fell 71 points at midday. The S&P 500 fell about 9 points. Efforts continued to stop the oil spewing from a blown-out well at the bottom of the Gulf of Mexico. Crews planned to lower a 100-ton concrete-and-steel box a mile below the Gulf to cap the well. It is hoped that the cap will collect as much as 85 percent of the oil gushing from broken wells after the Deepwater Horizon rig exploded April 20 and sank. The oil slick from the well has so far not interfered with tankers delivering crude along the Gulf Coast. Natural gas prices fell as supplies continued to grow. The Energy Information Administration said that natural gas inventories rose by 83 billion cubic feet to about 2 trillion cubic feet last week. That's almost 19 percent above the 5-year average. On the Nymex, natural gas lost 9.6 cents at $3.895 per 1,000 cubic feet. «Once again the market has outpaced the calendar,» MF Global wrote in a note to investors. «High summer brings not only the possibility of tropical activity but a surge in cooling demand. If the economy cooperates, a powerful rally might begin.» Gasoline futures continued to slide, however. In Thursday trading, gasoline fell 2.93 cents to $2.1911 per gallon after losing more than 10 cents on Wednesday and about 11 cents on Tuesday. Energy consultancy Cameron Hanover said it has not seen a drop in gasoline prices like this since the last half of 2008. «Gasoline prices reached levels that were eating into the consumer's ability to pay rents or mortgages, and the higher price was acting as a massive tax on the economy. How prices act on the next rally will tell us more about how large a sell-off we may have coming.» In other Nymex trading in June contracts, heating oil fell 2.64 cents to $2.1581 a gallon. In London, Brent crude gave up $1.15 at $81.46 on the ICE futures exchange.
